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The IMF advises governments not to block cryptocurrencies

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Photo: The IMF advises governments not to block cryptocurrencies. Source: Collage Leonid Lukashenko
Photo: The IMF advises governments not to block cryptocurrencies. Source: Collage Leonid Lukashenko

The International Monetary Fund (IMF) has reiterated its calls for the regulation of cryptocurrencies in certain countries, expressing the view that a complete ban may be ineffective in the long term. Instead, the IMF recommends managing the demand for cryptocurrencies through regulated instruments. This is stated in the organization's report on the regulation of the cryptocurrency sector in Latin America and the Caribbean.

According to the IMF document, different countries in the region have different approaches to cryptocurrency regulation. For example, in El Salvador, cryptocurrency is recognized as an official means of payment, while the Bahamas became the first country to introduce its own central bank digital currency (CBDC). On the other hand, other countries such as Argentina and the Dominican Republic have prohibited the use of cryptocurrencies within their jurisdictions.

The IMF considers a complete ban on cryptocurrencies to be ineffective in the long term. Instead, the IMF recommends the region to focus on addressing issues related to the demand for cryptocurrencies, including the need to meet citizens' digital payment needs and increasing transparency through the registration of cryptocurrency transactions in national statistics.

Earlier, the Managing Director of the International Monetary Fund, Kristalina Georgieva, highlighted the risks of retail CBDC implementation. According to her, the properties and consequences of implementing this type of CBDC may involve risks that have not yet been studied.

In Ukraine, a new version of the law on virtual assets is currently being developed, while there is effectively a ban on depositing and withdrawing funds from cryptocurrency exchanges to Ukrainian bank cards. This significantly complicates the operation of cryptocurrency exchanges in Ukraine, as well as volunteers who accept part of their donations in cryptocurrency. Moreover, this affects not only Ukraine but also residents of other countries who consider cryptocurrency transfers as one of the most convenient ways to support the Ukrainian army.

Currently, there is no legal way to work with the Ukrainian hryvnia through payment services for cryptocurrency exchanges. The market has shifted towards P2P aggregators and card transfers. Mykhailo Chobanyan, the founder of the Ukrainian cryptocurrency exchange Kuna, believes that the National Bank of Ukraine (NBU) has achieved nothing with its March decision, except for another negative reaction towards the institution.

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