Two weeks after Bangui’s controversial decision to adopt bitcoin as the “official currency”, cryptocurrency is back on the scene, this time with the question of the cross-border regulatory framework, which is currently almost non-existent.
This Tuesday, May 10, at the 10th “high level” conference organized by the Swiss National Bank and the International Monetary Fund (IMF), Kristalina Georgieva discussed the impact of digital currency on the International Monetary System (IMS).
Integration vs fragmentation
“The war has caused not only immense human suffering, but also a global economic shock and a sharp increase in the risk of a new cold war. A world that could fragment into economic blocs, creating obstacles to the cross-border movement of capital, goods, services, ideas and technologies”, worries Kristalina Georgieva, recalling that economic integration has precisely come out of the extreme poverty 1.3 billion people over the past three decades.
To make international payments efficient, inclusive, less expensive and therefore accessible to as many people as possible, the IMF DG calls on countries to work together to build “new roads, railways, bridges and tunnels”, using digital platforms to connect all types of payment system.
We can make payments work for everyone, in every country
In an IMF report published on the day of the conference, “Capital Flow Management Measures in the Digital Age: The Challenges of Crypto-Assets”, avenues for integrating cryptocurrencies into the SMI are discussed. Modernizing the system would first require the establishment of public digital infrastructures, which would thus facilitate “the circulation of information, compliance with regulations, competition between payment service providers and the settlement of cross-border transactions”.
“Such platforms are particularly important for economies with less advanced payment systems. By adopting various forms of currency, we can make payments work for everyone, in every country,” added the Bulgarian leader. But to respond to the challenges posed by the typical characteristics of crypto-assets, held and traded anonymously, the authors of the IMF report believe that measures to manage capital flows could be part of a broader panoply. policy tools to help countries reap the benefits of capital flows while managing the associated risks.
A management that would go through the clarification of the legal status of crypto-assets as well as the persons and entities carrying out activities related to cryptocurrencies, the development of a complete, coherent and coordinated regulatory framework and finally the implementation of agreements international collaboration for the surveillance of crypto-assets.
However, the authors of the report point out that even applying such a strategy, challenges on capital flow management measures will persist, especially in emerging market and developing economies, where regulatory and technological capacity constraints are significant. . Indeed, some crypto-assets will attempt to go underground and remain under the radar of regulators, while new innovations will need to be adopted to circumvent regulatory actions. A game of cat and mouse that is not ready to stop.