The international monetary fund (IMF) has urged policymakers to coordinate efforts to regulate the crypto market since it has a significant impact on economies worldwide.
The crypto market — which had at least $3 trillion in terms of market capitalization in November 2021 — has merged with the mainstream financial system, according to the IMF’s most recent September bulletin.
It is for this reason that the regulation of the market is more needed than ever, in order to stop future contagion from damaging the world economy.
But implementing a collective campaign for crypto regulation is the difficult part. Because of the cryptocurrency market’s rapid growth, it is challenging for regulators to monitor the thousands of participants.
The current regulatory framework may not be refined enough, as regulators are drawn to the various use cases of crypto assets like banks, commodities, and securities.
In some cases, the regulators may prioritising consumer protection, while the others want safety, soundness, or financial integrity optimisation.
Multiple nations have been working hard on issues pertaining to crypto regulation.
For instance, European Union and the U.S are still at the drafting stage, while some such as Japan and Switzerland have already introduced legislative bills.
However, diverse approaches are being used by various countries to implement regulatory frameworks for digital assets.
The IMF claimed that the various regulatory approaches do not offer an equal platform. Many crypto actors have chosen to relocate to a more welcoming country with the fewest regulatory restrictions as the result.
In an effort to close the regulatory gap brought about by dispersed regulations, the IMF has advised national authorities to take into account working toward a global regulatory framework.
All aspects of the crypto market will be covered by a comprehensive system that complies with the established regulatory framework.