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Crypto ban 'not effective' in long run

Bans on crypto-assets are not effective in the long run, says the International Monetary Fund.

By Mike Hesp
• 1 min read
Crypto ban 'not effective' in long run

Bans on crypto-assets are not effective in the long run, says the International Monetary Fund. instead, demand monitoring should be considered.

The International Monetary Fund (IMF) has published a report on the increasing proliferation of so-called digital central bank currencies (CBDCs). In it, the IMF also argues against a blanket ban on cryptocurrencies. According to the report, Latin America and the Caribbean in particular, where CBDCs are proliferating, offer "valuable lessons for the rest of the world."

The International Monetary Fund (IMF) notes "numerous challenges and risks" associated with Central Bank Digital Currencies (CBDCs), but also highlights their benefits. According to the IMF, well-designed CBDCs can strengthen the usability, resilience and efficiency of payment systems and help increase financial inclusion in Latin America and the Caribbean.

Therefore, a blanket ban on crypto assets would not make sense. "Although some countries have completely banned crypto assets because of their risks, this approach may not be effective in the long run. Instead, "the drivers of demand for cryptocurrencies" must be addressed. This also requires greater transparency "by recording transactions with cryptocurrencies in national statistics."

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