October 16, 2023

Saudi Arabia Urges IMF To Regulate Cryptocurrencies

Saudi Central Bank (SAMA) governor, Ayman Alsayari

Saudi Central Bank (SAMA) governor, Ayman Alsayari

The Saudi Central Bank (SAMA) governor, Ayman Alsayari, urged the International Monetary Fund (IMF) to regulate cryptocurrency.

During a recent Marrakech event, the IMF held its Annual Meetings, Alsayari said: “We need good supervision, regulation, and coordination of cryptocurrency activities. In this context, we support the work and relevant roadmap of the IMF and the Financial Stability Board to address cryptocurrency risks.”

The recently unveiled G20 Roadmap, presented at the G20 Finance Ministers and Central Bank Governors meeting, addresses the regulation of cryptocurrency activities.

The roadmap aims to coordinate global policy, develop mitigating strategies, and regulate matters concerning crypto assets.

As part of this effort, the IMF is calling for reforms in the crypto space to help foster global economic stability.

In his recent remarks, Alsayari expressed concern about the global economy slowing down and high inflation rates. In response, world leaders are advocating for tighter monetary policies across the globe. The G20 roadmap is viewed as helpful in managing the potential threat that cryptocurrencies pose to financial stability.

As a result of this instability, the global economic forecast for 2024 has been adjusted downwards to 2.9%. This forecast is likely to change further due to the escalation of the conflict in the Middle East between Israel and Hamas militants. The G20 roadmap is expected to bring about a new reassessment of cryptocurrencies by governments worldwide. For instance, India is currently considering the regulation of cryptocurrency based on IMF-FSB guidelines instead of an outright ban.

IMF has expressed concerns about the potential risks of crypto adoption to financial stability. However, with the growing global interest in Central Bank Digital Currencies (CBDCs), the IMF’s CBDC handbook and the regulatory roadmap are expected to create a more regulated cryptocurrency space.

This could lead to more governments considering working with digital assets rather than banning them and using this global guideline to direct their usage. While this could increase the adoption of cryptocurrencies, it may also make them unrecognizable from what we currently have in the ecosystem. Only time will tell whether this guide will effectively achieve its intended objectives.

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