US Treasury Secretary Janet Yellen stressed the importance of implementing a strong regulatory framework for cryptocurrencies at a G20 meeting on Feb. 25.
Speaking to Reuters, Yellen said it was “critical to put in place a strong regulatory framework”. She also noted that the United States is not proposing an “outright ban on crypto activities.”
Yellen’s comments follow earlier comments from International Monetary Fund (IMF) managing director Kristalina Georgieva, who said banning crypto should be an option:
“There has to be a very strong push for regulation… if regulation fails, if you’re slow to do it, then we shouldn’t get off the table and ban those assets because they could pose a risk to financial stability. “
Furthermore, Georgieva pointed out to reporters that it is necessary to distinguish central bank digital currencies (CBDCs) from stablecoins and cryptocurrencies – which are issued by private companies.
Related: What Are CBDCs? A beginner’s guide to central bank digital currencies
At an earlier conference, the first G20 finance ministers and central bank governors (FMCBG) under the Indian presidency discussed key financial stability and regulatory priorities, Cointelegraph reported.
The country’s finance minister, Nirmala Sitharaman, called for a coordinated global policy to address the macro-financial implications of crypto assets. Sitharaman has historically supported collaboration with other jurisdictions in the development of crypto regulations. The government of India has spent years debating whether to regulate or even ban cryptocurrencies.
On February 23, the IMF released an action plan on crypto assets, urging countries to abolish legal tender status for cryptocurrencies. The paper, titled “Elements of Effective Policies for Crypto Assets,” outlined a framework of nine policy principles that address macro-financial, legal and regulatory, and international coordination issues.
After visiting El Salvador earlier this month, the IMF suggested that the country reconsider its plans to increase exposure to Bitcoin, citing the cryptocurrency risk to El Salvador’s fiscal sustainability and consumer protection, as well as its financial integrity and stability.
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