IMF Economists Say Complete Crypto Bans ‘May Not Be Effective’ Long-Term Policy Choices

Economists with the International Monetary Fund (IMF) are calling for more proactive measures to manage the risks of crypto as several nations crack down on the industry.

In a new report, IMF’s Western Hemisphere Department division chief Mauricio Villafuerte and economists Rina Bhattacharya and Dmitry Vasilyev warn that outrightly banning crypto may have adverse consequences.

“While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run.”

The report, which studies the status of crypto in Latin America and the Caribbean (LAC) region, says crypto poses problems for some nations despite the potential benefits of the new asset class.

“Crypto asset adoption also presents numerous challenges and risks, particularly for vulnerable LAC countries with a history of macroeconomic instability, low institutional credibility, substantial capital flows, corruption, and extensive informal sectors.”

But instead of banning crypto, the economists say nations should have a policy response that takes into account what pushes the growing demand for digital assets.

“The region should instead focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics.”

The report says central bank digital currencies (CBDCs) present a viable option.

“If well designed, CBDCs can strengthen the usability, resilience, and efficiency of payment systems and increase financial inclusion in LAC.”

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Follow us on Twitter, Facebook and Telegram

Surf The Daily Hodl Mix

Check Latest News Headlines

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney