IMF Advises How Crypto Should Be Regulated Citing ‘Urgent Need for Cross-Border Collaboration’

IMF Advises How Crypto Should Be Regulated Citing 'Urgent Need for Cross-Border Collaboration'

The International Monetary Fund (IMF) has outlined some recommendations of how cryptocurrency should be regulated, noting that there is an urgent need for cross-border collaboration and cooperation on cryptocurrency regulation.

IMF Provides Recommendations on Crypto Regulation

The International Monetary Fund published a blog post on cryptocurrency regulation Thursday. The post titled “Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated” is authored by Tobias Adrian, Dong He, and Aditya Narain from the IMF’s Monetary and Capital Markets Department.

Noting that “Crypto assets and associated products and services have grown rapidly in recent years” and their “interlinkages with the regulated financial system are rising,” the authors acknowledged:

Crypto assets are potentially changing the international monetary and financial system in profound ways.

“Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated,” they explained, adding: “In fact, we think these financial stability risks could soon become systemic in some countries.”

IMF Suggests How Crypto Should Be Regulated

The IMF post then discusses how cryptocurrency should be regulated. “The global regulatory framework should provide a level playing field along the activity and risk spectrum,” the authors asserted and proceeded to list three elements that should be included.

Firstly, crypto service providers — including those offering storage, transfer, settlement, and custody of reserves and assets — “should be licensed or authorized,” the authors wrote. “Licensing and authorization criteria should be clearly articulated, the responsible authorities clearly designated, and coordination mechanisms among them well defined.”

Secondly, “Requirements should be tailored to the main use cases of crypto assets and stablecoins,” they added, noting that regulators “need to coordinate to address the various risks arising from different and changing uses,” including central banks and securities watchdogs.

Lastly, the IMF post notes that “Authorities should provide clear requirements on regulated financial institutions concerning their exposure to and engagement with crypto.”

The authors further warned that “In emerging markets and developing economies, the advent of crypto can accelerate what we have called ‘cryptoization‘—when these assets replace domestic currency, and circumvent exchange restrictions and capital account management measures.” They concluded:

There is an urgent need for cross-border collaboration and cooperation to address the technological, legal, regulatory, and supervisory challenges.

What do you think about the IMF’s suggestion for crypto regulation? Let us know in the comments section below.

Indian Prime Minister Modi Tells President Biden’s Summit: Cryptocurrency Should Be Used to Empower Democracy

Indian Prime Minister Modi Tells President Biden's Summit: Cryptocurrency Should Be Used to Empower Democracy

India’s Prime Minister Narendra Modi talked about cryptocurrency at a recent Summit for Democracy hosted by U.S. President Joe Biden. He called for global collaboration on cryptocurrencies “so that they are used to empower democracy, not to undermine it.”

Prime Minister Narendra Modi Talks About Crypto at President Joe Biden’s Summit for Democracy

President Joe Biden hosted a two-day virtual “Summit for Democracy” on Dec. 9-10. The conference “brought together leaders from government, civil society, and the private sector in our shared effort to set forth an affirmative agenda for democratic renewal and to tackle the greatest threats faced by democracies today through collective action,” the U.S. Department of State described.

Indian Prime Minister Narendra Modi said at the summit Friday that emerging technologies, such as cryptocurrencies, should be used to empower democracy. He stressed:

We must … jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they are used to empower democracy, not to undermine it.

The Indian government is currently working on cryptocurrency legislation. A crypto bill has been listed for consideration in Lok Sabha, the lower house of India’s parliament. Reports suggest that the government is planning to regulate crypto assets but ban the use of cryptocurrency for payments. A deadline will also be set for investors to declare their crypto holdings.

Prime Minister Modi will reportedly take a final decision on how cryptocurrency will be regulated in India. A high-level meeting was held Thursday to consider all options including “a complete ban on private cryptocurrencies, a partial ban, allowing all categories of crypto products with regulation, or just a select few with regulation.”

Do you agree with Indian Prime Minister Modi about cryptocurrency? Let us know in the comments section below.

Regulator Claims South Africa Set to Unveil Cryptocurrency Regulatory Framework in Early 2022

In early 2022, South Africa will have a new regulatory framework that covers cryptocurrencies, a commissioner with a regulatory body has said.

Highly Risky Products

South Africa’s financial sector regulator, the Financial Sector Conduct Authority (FSCA) is set to unveil a new regulatory framework that covers cryptocurrency in early 2022.

According to Unathi Kamlana, a commissioner with FSCA, the new framework will determine how the trading of crypto coins like bitcoin (BTC) should be conducted. In his remarks during an interview, Kamlana suggested his organization was not keen on legitimizing highly risky products. The commissioner said:

What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. We must be very careful to not just legitimize them.

The FSCA, which is reportedly drafting the crypto trading rules in conjunction with other regulatory bodies, will also examine how the currencies interact with traditional financial products and if these pose a threat to financial stability.

Cryptos Do Not Pose a Systemic Risk

Still, in his remarks, Kamlana asserts that cryptocurrencies do not pose a systemic risk to the stability of the financial services sector just yet. The commissioner however said the FSCA sees cryptos as assets and not currency.

Meanwhile, in keeping with the stance adopted by several countries, Kamlana urged South Africans to shun privately issued/created digital currencies which are not as stable and reliable as stablecoins issued by central banks.

“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank. The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability,” said Kamlana.

What are your thoughts about this story concerning South Africa’s regulatory framework for digital assets? Tell us what you think in the comments section below.

South Africa’s financial regulator plans to introduce framework aimed at protecting vulnerable crypto investors: report

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky,” said Unathi Kamlana.

Unathi Kamlana, the commissioner of South Africa’s Financial Sector Conduct Authority has reportedly said the government’s rollout of a crypto framework would be aimed at mitigating any potential risks.

According to a Friday report from Bloomberg, Kamlana said the financial regulator planned to present a regulatory framework early in 2022 intended to protect investors from “potentially highly risky” crypto assets. The commissioner said any framework on crypto would be created in coordination with the Prudential Authority and Financial Surveillance Board of the South African Reserve Bank.

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky,” said Kamlana. “We must be very careful to not just legitimize them.”

The FSCA commissioner’s comments follow South Africa’s Intergovernmental Fintech Working Group saying in June it would be laying the groundwork for the “phased and structured” regulation of cryptocurrencies in South Africa. The African nation’s policy on crypto has largely been one of noninterference, but also in warning the public that there was little protection or recourse from the government for scams or fraud.

When the co-founder of South African crypto investment platform AfriCrypt allegedly vanished with billions in user funds, the FSCA said it could not take action as crypto assets were unregulated in the country. After receiving a warning, major crypto exchange Binance also challenged the FSCA’s authority as South Africa’s financial regulator, arguing instead that the country’s Financial Intelligence Centre ensured crypto firms were in compliance with local laws.

Related: South African asset manager denies stealing billions from users, claims $5M was lost in hack

In May, the South African Reserve Bank began an exploratory study on rolling out a central bank digital currency, or CBDC. The central bank is also part of a pilot program with those in Australia, Singapore, and Malaysia to trial international settlements using CBDCs.

Indian PM calls for cryptocurrencies to ’empower’ democracy at global summit

Narendra Modi also called for a global standard on cryptocurrencies and major social media platforms in an effort to facilitate free and fair elections and governance.

Cryptocurrency made an appearance at a global online summit for world leaders in a speech from Indian Prime Minister Narendra Modi.

At Friday’s events for the Summit for Democracy hosted by U.S. President Joe Biden, Modi said India would be willing to offer other countries “innovative digital solutions” to facilitate free and fair elections and governance. In addition, the Prime Minister called for a global standard on cryptocurrencies and major social media platforms, likely referring to the impact some have had on politics in India as well as many other countries:

“We must also jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they are used to empower democracy, not to undermine it […] By working together, democracies can meet the aspirations of our citizens.”

Indian Prime Minister Narendra Modi speaking at Friday’s Summit for Democracy

As the Prime Minister of India, Modi represented roughly 1.4 billion people at the summit, the largest democracy in the world by a large margin. His remarks came as the Indian government prepares to consider a bill that could ban certain cryptocurrencies, but also encourage the creation of a digital rupee. 

Different reports have suggested that the legislation is aimed at regulating crypto rather than banning it. The same bill has previously appeared on the Indian parliament’s agenda but has not yet led to a vote. The Reserve Bank of India also had a blanket ban on crypto on the books until March 2020, when the country’s supreme court overturned it.

Related: Lines in the sand: US Congress is bringing partisan politics to crypto

Despite the lack of regulatory clarity in India, Modi has called on countries to work together on crypto and blockchain and urged others to consider the ethics when using the technology. The next general election in India is expected to occur in 2024 when citizens will choose new members for the country’s lower house of parliament.

“It is important that all democratic nations work together on [crypto] and ensure it does not end up in wrong hands, which can spoil our youth,” said the PM in a Nov. 17 tweet.

Indian Prime Minister Narendra Modi to Take Final Decision on Cryptocurrency Regulation

Indian Prime Minister Narendra Modi to Take Final Decision on Cryptocurrency Regulation

A high-level meeting is reportedly being held on cryptocurrency regulation in India and Prime Minister Narendra Modi will take a final decision on how India will regulate the crypto sector. All options are being discussed including full and partial regulation as well as a complete ban and a partial ban.

Indian Crypto Regulation to Be Decided by Prime Minister Modi

Indian Prime Minister Narendra Modi will take a final decision on the country’s cryptocurrency regulation, the Economic Times reported Friday, citing two people familiar with the development.

A high-level meeting was held Thursday to consider all options of how India should regulate the crypto sector, the publication noted, adding:

The options include a complete ban on private cryptocurrencies, a partial ban, allowing all categories of crypto products with regulation, or just a select few with regulation.

Issues discussed in the meeting included stakeholder views and concerns raised by the country’s central bank. The Reserve Bank of India (RBI) has said on several occasions that it has “serious” and “major” concerns regarding cryptocurrency.

The Indian government has listed a bill titled “Cryptocurrency and Regulation of Official Digital Currency Bill 2021” to be taken up in the current session of Lok Sabha, the lower house of India’s parliament.

Last week, Indian Finance Minister Nirmala Sitharaman answered some questions regarding the cryptocurrency bill and the government’s plan for the crypto sector. She confirmed that the bill had been reworked from the original version that seeks to categorically ban cryptocurrencies.

Reports then surfaced that the Indian government is planning to regulate crypto assets, like bitcoin, with the Securities and Exchange Board of India (SEBI) as the main regulator. However, other reports indicate that the government seeks to ban the use of crypto for payments and will set a deadline for investors to declare their crypto holdings. The bill will also set universal know-your-customer (KYC) rules for crypto exchanges.

The publication added that the finance minister has finalized the draft note on the proposed cryptocurrency bill.

However, the government felt that some sections of the bill need more detailed discussions, particularly “the principles underlying the bill” and the broad details of how cryptocurrencies should be treated in India, the news outlet conveyed. One person noted that “discussions are likely to focus on various options and pros and cons of adopting them,” elaborating:

PM will now take a final call on these.

In November, Prime Minister Modi chaired a high-level meeting on crypto regulation with participation from the finance ministry and the RBI. He also urged all democratic countries to collaborate to ensure that cryptocurrencies, particularly bitcoin, do not fall into the wrong hands.

On Friday, the prime minister said at a virtual summit hosted by U.S. President Joe Biden that emerging technologies, including cryptocurrencies. should be used to empower democracy, not undermine it.

What do you think Prime Minister Narendra Modi will decide about India’s crypto regulation? Let us know in the comments section below.

Prosecutor General’s Office Wants to See ‘Cryptocurrency’ in Russian Law

Prosecutor General’s Office Wants to See ‘Cryptocurrency’ in Russian Law

The Prosecutor General’s Office of the Russian Federation has insisted that the term “cryptocurrency” should be added to the country’s legislation. The move would allow authorities in Moscow to confiscate digital assets that have been involved in criminal activities.

Russian Prosecutor General’s Office Prepares Amendments Allowing Seizure of Cryptocurrency


With cryptocurrencies being only partially regulated through the law “On Digital Financial Assets,” work is underway in Russia to adopt legislation introducing comprehensive rules for the turnover of bitcoin and the like. The Russian Prosecutor General’s Office has joined these efforts as it wants the term “cryptocurrency” added to the legal texts.

“We have developed amendments to a number of regulatory legal acts so that cryptocurrencies in illegal circulation are not only recognized as а subject of a crime, but there’s also a legal possibility of their arrest and confiscation,” Russia’s Prosecutor General’s Igor Krasnov said in an interview with RIA Novosti news agency.

Russian lawmakers are mulling over other legislative changes to establish a proper legal framework for cryptocurrencies. A number of activities related to digital coins remain outside the scope of the current law, including taxation, mining, and payments, for example.

Calls have been mounting among officials in Moscow to recognize cryptocurrency mining as an entrepreneurial activity and tax it accordingly. At the same time, the Central Bank of Russia (CBR) remains opposed to the legalization of digital currencies as a means of payment. The regulator claims these represent “money surrogates” that are banned in Russia.

The monetary authority is currently developing a digital version of the national fiat, insisting that’s exactly what the Russians need. The digital ruble will provide а low cost and reliable payment solution that also protects personal data, the head of the CBR, Elvira Nabiullina, promised in November. Bank of Russia is planning to commence trials for the CBDC in January 2022.

Last month, the Russian Prosecutor General’s Office also proposed recognizing cryptocurrency and other virtual assets as property in the country’s Criminal Code. Igor Krasnov explained in the State Duma, the lower house of parliament, that the legal definition will be used in court proceedings.

Krasnov also revealed that his department has already drafted a bill that would regulate the matter and expressed hope that lawmakers would support it. Digital currencies such as bitcoin have been recognized as property under several other Russian acts like the laws on bankruptcy and enforcement proceedings, the anti-money laundering legislation, and the country’s anti-corruption law.

Do you expect Russia to add the term “cryptocurrency” to its legislation? Share your thoughts on the subject in the comments section below.

CFTC Commissioner Opposes Regulation by Enforcement, Says Crypto Needs Clearer Rules

CFTC Commissioner Opposes Regulation by Enforcement, Says Crypto Needs Clearer Rules

A commissioner with the Commodity Futures Trading Commission (CFTC), Dawn Stump, has voiced concerns about cryptocurrency regulation through enforcement — the approach taken by both the CFTC and the U.S. Securities and Exchange Commission (SEC).

CFTC Commissioner Stump on Crypto Regulation

CFTC Commissioner Dawn Stump has raised concerns regarding the approach her agency and the U.S. Securities and Exchange Commission (SEC) are taking to regulate the crypto industry. The commissioner is a vocal proponent of clarifying guidelines for crypto assets.

In an interview with the Financial Times, published Wednesday, she explained that she opposes “regulating through enforcement.” Noting that regulators are hitting companies with fines and lawsuits without providing clear compliant guidelines, she said:

What I discourage here at the CFTC is bringing enforcement actions without giving the tools they need to be compliant … I think there’s a lot of that happening right now.

She emphasized: “We’ve never designed a regulation that explains to these entities how they could achieve that registration. I would have preferred that we would not have brought those types of cases until we had better defined how they might achieve compliance.”

Several lawmakers have voiced similar concerns and have called for more clarity on crypto regulation. Senator Pat Toomey (R-Pa.) said this week that “failure” by SEC Chairman Gary Gensler “to provide clear rules of the road for cryptocurrencies underscores the need for Congress to act.”

SEC Commissioner Hester Peirce has also argued against regulation by enforcement, emphasizing the need for more clarity in crypto regulation. However, Gensler has insisted that the rules are clear on whether an asset is a security.

Nonetheless, Stump said:

I do wish the SEC would [give] more specifics on how they arrive at the conclusion that some of these things are securities.

What do you think about the comments by CFTC Commissioner Dawn Stump? Let us know in the comments section below.

US lawmaker purchases exposure to Bitcoin through Grayscale shares

Congressperson Marie Newman bought between $15,001 and $50,000 of GBTC in addition to up to $215,000 in Coinbase Global’s COIN shares.

Illinois Representative Marie Newman has disclosed she purchased up to $50,000 in exposure to crypto through shares of Grayscale Bitcoin Trust.

According to a financial disclosure report filed with the U.S. House of Representatives on Wednesday, Congressperson Newman bought between $15,001 and $50,000 of GBTC between Nov. 9 and last Saturday. In addition, she conducted four separate purchases of shares of Coinbase Global’s Class A stock between November and December, up to $215,000.

Section of Illinois Representative Marie Newman’s financial disclosure report for 2021

Members of the U.S. House of Representatives and Senate are permitted to buy, sell and trade stocks and other investments while in office but are also required to report such transactions of more than $1,000 within 30 to 45 days. This reporting is in accordance with the Stop Trading on Congressional Knowledge Act, or STOCK Act, passed in 2012 under President Barack Obama with nearly unanimous approval in both chambers of Congress. 

According to data gathered from financial disclosure reports by Bitcoinpoliticians.org, six other members of Congress currently hold cryptocurrency or some exposure to crypto assets, including Wyoming Senator Cynthia Lummis, Texas Representative Michael McCaul, Pennsylvania Representative Pat Toomey, Alabama Representative Barry Moore, New Jersey Representative Jefferson Van Drew, and Florida Representative Michael Waltz. However, many federal judges and lawmakers have reportedly flouted the STOCK Act by not disclosing certain investments.

Related: Pro-crypto senator Cynthia Lummis discloses up-to-$100K BTC purchase

The disclosure report from Newman comes following members of Congress questioning CEOs of major stablecoin issuers and crypto firms in a hearing to better understand the technology and where a regulatory path may lead. Progressive lawmaker Alexandria Ocasio-Cortez also recently spoke out on social media, saying it was inappropriate for her to hold Bitcoin (BTC) or other digital assets because lawmakers have access to “sensitive information and upcoming policy” and such investments could affect their impartiality.

CIA Working on Various Crypto-Focused Projects, Director Confirms

CIA Is Working on Various Crypto-Focused Projects, Director Confirms

The director of the U.S. Central Intelligence Agency (CIA) has revealed that the agency is working on a number of cryptocurrency-focused projects. Cryptocurrencies “could have enormous impact on everything from ransomware attacks,” he said.

CIA Has Been Working on Various Crypto Projects

CIA Director William Burns revealed Monday at the Wall Street Journal’s CEO Summit that the agency is working on “a number of different projects focused on cryptocurrency.”

Responding to a question from someone in the audience about whether the CIA is on top of cryptocurrencies, Burns said:

This is something I inherited. My predecessor had started this, [and] had set in motion a number of different projects focused on cryptocurrency.

Burn elaborated that the agency is “trying to look at second- and third-order consequences as well and helping our colleagues in other parts of the U.S. government to provide solid intelligence on what we’re seeing as well.”

The CIA director explained that cryptocurrencies “could have enormous impact on everything from ransomware attacks … because one of the ways of getting at ransomware attacks and deterring them is to be able to get at the financial networks that so many of those criminal networks use and that gets right at the issue of digital currencies as well.”

The U.S. government has made combating ransomware a key priority. In June, the Biden administration expanded “cryptocurrency analysis to find and pursue criminal transactions” as part of its strategy to combat ransomware.

In addition, the Department of the Treasury has taken actions against cryptocurrency exchanges “responsible for laundering ransoms” as part of the whole-of-government effort to counter ransomware. One exchange was sanctioned in September and another in November.

What do you think about the CIA working on a number of crypto-focused projects? Let us know in the comments section below.