International Monetary Fund (IMF) Managing Director Kristalina Georgieva highlighted the necessity of regulating cryptocurrencies due to their potential risks to financial stability during a digital currencies conference in Seoul.
Georgieva emphasized that extensive crypto adoption might destabilize monetary policy, capital flow management measures, and fiscal sustainability, impacting tax collection due to the volatile nature of crypto assets, according to report by Reuters.
She advocated for establishing regulations to avoid crypto-related risks while leveraging its technologies to enhance the financial system's efficiency and accessibility.
Georgieva clarified that regulatory measures aim to promote innovation rather than stifle it, asserting that well-crafted rules can foster and direct innovation.
In a panel discussion on digital money development, she underlined policymakers' choices: participate and improve the process or risk exclusion as the advancement progresses regardless.
Georgieva highlighted the importance of mutual learning, particularly from emerging markets like India, known for its digital public infrastructure. Additionally, she acknowledged the value of insights from advanced economies' monetary history in shaping digital money evolution.