Lol! IMF Economist Urges Developing Countries Not To Ban Crypto
JAKARTA – The chief economist for the International Monetary Fund (IMF) Gita Gopinath recently appealed to developing countries to refrain from banning cryptocurrencies. Gopinath explained that global regulation of the crypto industry is a “necessity of the moment.”
Reporting from Cryptopotato, Gopinath outlined the regulatory difficulties surrounding crypto at an event organized by the National Council for Applied Economic Research (NCAER) on Wednesday. He said that global policy on crypto was an urgent need to address the challenges that technology poses to emerging markets.
He also revealed that the act of banning cryptocurrencies is completely impractical considering that cryptocurrencies are in demand by the global community and already have exchanges in various countries. Therefore, banning crypto is not the right course of action for developing countries and more importantly to regulate it.
“Regulatory crypto assets and currencies is very important, especially for developing countries and developing economies, as banning them may not work because crypto exchanges are located overseas, which makes it easier for one to trade them despite the bans,” said Gopinath.
This September, China announced a ban on all crypto exchanges from the country, after which exchanges like Bitmart and Biki left the country. Meanwhile, India is still considering an equivalent ban.
Gopinath emphasizes making “global” policy around crypto, as cross-border transactions make the regulations of any country against it quite weak. "They can be used to circumvent exchange rate controls, capital controls and capital flow movements," he said.
MicroStrategy CEO Michael Saylor, owner of the largest Bitcoin in the world, has highlighted this exact property as very helpful from a business perspective. Unlike real estate, Bitcoins can be transferred across borders at the “speed of light” to the most tax-friendly jurisdictions.
Christine Lagarde – President of the European Central Bank – has also pushed for global cryptocurrency regulation, to combat decentralized “money laundering” capabilities.
Apart from India and China, most other jurisdictions have ruled out banning cryptocurrencies, instead taking a regulatory approach. In fact, many US officials see China's ban as a great opportunity to welcome the industry, capitalizing on its innovations. These include Ted Cruz, Hester Peirce, and Pat Toomey, among others.
Singapore also chose not to ban crypto. MAS Director Ravi Menon believes crypto can “lead to very good outcomes for the economy and society,” and prefers to devise a regulatory framework in order to operate within it.