IMF Publishes Report Detailing Regulatory Recommendations for the Cryptocurrency Industries

The International Monetary Fund (IMF) has released a report that focuses on advancements within the fintech industry, specifically looking at the rapidly evolving cross-border payments industry. An emphasis is placed upon discussing distributed ledger technology, which is presented as having the “potential to offer important service improvements and costs savings.” Much of the report seeks

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The International Monetary Fund (IMF) has released a report that focuses on advancements within the fintech industry, specifically looking at the rapidly evolving cross-border payments industry. An emphasis is placed upon discussing distributed ledger technology, which is presented as having the “potential to offer important service improvements and costs savings.” Much of the report seeks to define and classify the cryptocurrency industry, whilst highlighting key concerns and recommendations with regards to regulators and lawmakers.

Also Read: EU to Consider Adopting Anti-Money Laundering Laws That Address Bitcoin Exchanges

The IMF Report Seeks to Provide Detailed Classifications for Distributed Ledger Technology

The IMF has released a report that provides detailed analysis of cryptocurrency technology, and the potential implications that such may have for lawmakers, governments, and financial institutions.

IMF Publishes Report Detailing Regulatory Recommendations for the Cryptocurrency Industries

The report stresses that these “new technologies may require jurisdictions to revise rules governing ownership and contractual rights and obligations”. Greater KYC guidelines, regulatory oversight and regulation pertaining to new cryptocurrency development, and a critical discussion pertaining to balancing privacy and transparency considerations are recommended as prospective policy considerations for governments in assessing DLTs – framing such as necessary in order to gain widespread consumer trust in distributed ledger technology (DLT). Greater regulatory oversight was also advocated for the purposes of combating money laundering, tax evasion and terrorist financing.

The IMF report seeks to provide detailed classifications for distributed ledger technology. The report categorizes DLT as being either ‘permissionless’, or ‘permissioned’. ‘Permissionless’ DLTs are likened to Bitcoin, and described as “open schemes” that “could be very disruptive if successfully implemented.” ‘Permissioned’ DLTs on the other hand, are defined as having a “validation process… [that is] controlled by a preselected group of participants (‘consortium’) or managed by one organization (‘fully-private’)”.

The Report’s Classifications May Inform Governments’ Future Cryptocurrency Regulations

The IMF report seeks to demarcate between “intrinsic tokens”, and “asset-based tokens”. “DLT records the transfer of ownership of ‘digital tokens’, which are essentially units in a ledger. They can either have intrinsic value (an ‘intrinsic token’ like Bitcoin), or be digital representations of a physical or digital asset that exists outside the ledger (an ‘asset-based token’, representing an interest in another asset, such as securities).” This semantic differentiation is important as it could be used as the basis to develop separate juridical frameworks for tokens tied to a fully developed and functioning platform/project, and tokens that have been issued by a project that is conducting an ICO – allowing for the demarcation to be used as a basis for regulators to clamp down on the rapidly proliferating ICO industry.

The report also discusses the antagonism the decentralized trustless execution of transactions on blockchain networks increasingly becoming tied to ‘real-world’ transactions. ”The legal status of a digital token, and the legal effect of its transfer are not clear. For example, would the transfer of an asset-backed token (e.g., representing a security) on a ledger transfer legal ownership of the security or would registration outside the ledger (e.g., in a corporate share registry) still be required? Jurisdictions are trying to develop answers to these questions but country practice varies. The resolution of these questions is crucial for the economy to function and will require more thought by policymakers.”

The IMF Report Has a Number of Positive Implications for the Cryptocurrency Industry

The report advocates that “policymak[ers] will need to be nimble, experimental, and cooperative”, and ultimately encourages governments to work together in developing an inclusive regulatory apparatus for distributed ledger technology. The IMF also promotes the adoption of distributed ledger technology on the part of banks and financial institutions and encourages the creation of “regulatory sandboxes” for the purposes of fostering the “innovative and dynamic” DLT industry.

The IMF report has a number of positive implications for the cryptocurrency industry. The encouragement of inclusive regulatory frameworks and promotion of governments seeking to work with the DLT industry shows that major global economic institutions are recognizing the innovative potential of bitcoin, and seeking to harness rather than oppress such. The report also recognized that the distributed ledger technology is producing an incredible array of what are essentially free technological breakthroughs.

IMF Publishes Report Detailing Regulatory Recommendations for the Cryptocurrency IndustriesDespite signifying a path toward mainstream adoption for cryptocurrencies and digital ledger technology, there are many within the cryptocurrency community that are deeply skeptical of the IMF’s report. Some fear that blockchain and distributed ledger technology will become another tool wielded by the state for centralization and control. The report’s cautious recognition of bitcoin’s “disruptive potential”, and classification of bitcoin as a “permissionless” token may signify a preference toward the development and use of DLT projects that compete with bitcoin’s utility, but can be subject to influence from governments and institutions.

Do you think that the IMF’s report has positive or negative implications for the cryptocurrency economy? Share your thoughts in the comments section below!


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Cryptocurrency Markets Come Back to Life, Ethereum Gains 15%

TheMerkle Cryptocurrency BullishThe past few days have been rather interesting for cryptocurrency, even though a lot of people would not necessarily agree. Virtually every currency lost value this week, although it appears markets are slowly recovering as we speak. In fact, numerous coins and tokens are noting double-digit gains once again, which is good to see. We are not out of the woods yet, though, as the cryptocurrency market cap shrunk quite a bit. Cryptocurrency Markets Start to Rebound After a few days of watching the trading charts, many traders will breathe a sigh of relief. It seems the recent bearish trend

TheMerkle Cryptocurrency Bullish

The past few days have been rather interesting for cryptocurrency, even though a lot of people would not necessarily agree. Virtually every currency lost value this week, although it appears markets are slowly recovering as we speak. In fact, numerous coins and tokens are noting double-digit gains once again, which is good to see. We are not out of the woods yet, though, as the cryptocurrency market cap shrunk quite a bit.

Cryptocurrency Markets Start to Rebound

After a few days of watching the trading charts, many traders will breathe a sigh of relief. It seems the recent bearish trend has been averted once again and all markets are showing signs of life. That is only to be expected, even though Bitcoin hasn’t lost or gained all that much compared to a few days ago. In fact, Bitcoin is up by just 3.65% over the past 24 hours, which is a somewhat surprisingly low number.

Most people will be paying attention to what is going on with Ethereum, though. After taking a severe beating over the past few days, it is the first currency to record a double-digit gain in the past 24 hours. More specifically, Ether’s value increased by 15.83% again, even though the market cap gap compared to Bitcoin is back at nearly US$15bn. It will take some time to recover fully in this regard, but for now, things are looking quite good.

It has to be said, Ethereum is not the only currency posting double-digit gains right now. Other top-15 cryptocurrencies showing similar gains include Dash, Stratis, and Steem. It is evident there is still a very large demand for alternative cryptocurrencies as a way to diversify an investment portfolio. It is never a good idea to put all eggs in one basket, especially not in the world of cryptocurrency. Then again, not every currency or token is worth investing in either.

It is quite interesting to look at all of the currencies listed on CoinMarketcap, though. Right now, only eight of them are reporting losses, albeit that is not entirely surprising where some of these currencies are concerned. Neither Bitcoin Plus nor BitcoinDark have anything competitive to offer. Primecoin never amounted to much either, nor did Worldcoin. Seeing so many currencies in the green is very spectacular, although not entirely surprising now that Bitcoin is going up in value once again.

That being said, it will take a few days for all markets to stabilize and find their groove again. Any gains or losses on the charts right now can be erased in mere minutes, depending on how Bitcoin’s price evolves. No one can deny virtually all currencies have their value linked to Bitcoin in one way oranother.. This is especially true for all cryptocurrencies in the top 15 right now. Some smaller coins might buck the trend, but that is mainly due to traders creating a pump-and-dump effect.

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