IMF, FSB Release Synthesis Paper: Policies for Crypto Assets

The IMF and FSB have released a joint synthesis paper containing its policy recommendations for crypto assets. 

At the request of the G20, the International Monetary Fund (IMF) and Financial Stability Board (FSB) released a joint white paper publishing the IMF’s and the FSB’s recommendations and standards for crypto policy.

“The collective recommendations provide comprehensive guidance to help authorities address the macroeconomic and financial stability risks posed by crypto-asset activities and markets, including those associated with stablecoins and those conducted through so-called decentralised finance (DeFi).” 

IMF and FSB Come Together To Make Recommendations

Independently, the IMF and FSB have made comments and recommendations regarding crypto asset regulation but have now joined forces to develop more comprehensive guidance.

In a press release, the FSB explained:

“The IMF has outlined key elements of an appropriate policy response, including macroeconomic, legal and financial integrity considerations and implications for monetary and fiscal policies. In parallel, the FSB and standard-setting bodies (SSBs) have published regulatory and supervisory recommendations and standards to address financial stability, financial integrity, market integrity, investor protection, prudential and other risks derived from crypto-assets.”  

The IMF and FSB’s “synthesis paper integrating the macroeconomic and regulatory perspectives of crypto assets” is part of this year’s G20 mission of establishing a global crypto regulatory framework. 

The G20 announced earlier this year that the FSB, IMF and the Bank for International Settlements (BIS) would publish recommendations for a global regulatory framework. 

In addition to the independent reports already published by the IMF and FSB, the BIS will provide a report on analytical and conceptual issues and possible risk mitigation strategies related to crypto assets. 

Implementation Roadmap Suggested

The paper explains how the IMF and FSB’s policy and regulatory frameworks interact and complement each other but does not introduce new policies, recommendations or expectations for regulatory authorities. 

The literature addresses the “key risks to macroeconomic stability, financial stability, and other areas (such as legal, financial integrity and market integrity related risks), posed by crypto-asset activities.” Further, it introduces policy responses to these risks in the areas of macro-financial policies, financial stability regulation, and other policies and regulations. 

Specifically, the paper suggests jurisdictions should “safeguard monetary sovereignty and strengthen monetary policy frameworks, guard against excessive capital flow volatility and adopt unambiguous tax treatment of crypto-assets” to protect economies from potential problems associated with crypto assets. 

Finally, the efforts introduce an “implementation roadmap,” explaining the planned and ongoing work related to crypto-asset regulatory frameworks, “which, taken together, seek to: build institutional capacity beyond G20 jurisdictions; enhance global coordination, cooperation, and information sharing; and address data gaps necessary to understand the rapidly changing crypto-asset ecosystem.” 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.