There has been a joint synthesis paper made by both the FSB (Financial Stability Board) and IMF (International Monetary Fund). The paper highlights the vast adoption of assets pertaining to crypto and that they could undermine the monetary policy’s effectiveness.
The paper that was released on Thu. stated:
“Widespread adoption of crypto-assets could undermine the effectiveness of monetary policy, circumvent capital flow management measures, exacerbate fiscal risks, divert resources available for financing the real economy, and threaten global financial stability. These risks could reinforce each other, as financial instability can make maintaining price stability more difficult and vice versa; cause destabilizing financial flows; and strain fiscal resources”.
This paper is essentially the first attempt at establishing a global framework for the cryptocurrencies. It is to be submitted to the G20 members prior to the Leaders; Summit that will take place on both Sep. 9 & 10.
The expected outcome of the meeting is reaching a global consensus on a more common framework for regulation. The Indian Presidency G20 has requested both the FSB and IMF to draft the joint synthesis paper for policy standards and regulations. This is done with the intention of helping out the authorities to address issues pertaining to risks related to financial stability by Cryptos.
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