IMF exec board endorses crypto policy framework, including no crypto as legal tender

Regulation

The executive board of the International Monetary Fund (IMF) has assessed a paper on crypto asset policy published by the fund and expressed its agreement with its proposed policy framework. The paper, titled “Elements of Effective Policies for Crypto Assets,” developed a framework of nine policy principles that addressed macrofinancial, legal and regulatory, and international coordination issues. 

The proposed principles were mainly quite broad, emphasizing analysis, monitoring and guarding. The paper explicitly says the proposals should be taken up by “the Directors.” The first principle did contain a concrete injunction, reading:

“Safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto assets official currency or legal tender status.”

The executive board expressed its agreement with the proposals in the paper and specifically endorsed its position on crypto as legal tender, saying members “generally agreed” with it. The board also repeated the principle of “same activity, same risk, same regulation” and “emphasized that the Fund could serve as a thought leader in further analytical work” on crypto assets.

The paper was dated January 2023, and the executive board met to discuss it on Feb. 8, but the paper and the meeting were made known to the public on Feb. 23.

Related: IMF calls for tighter crypto regulation in Africa as the industry unfolds

The IMF has made its opposition to the use of crypto as legal tender well known, especially since El Salvador adopted Bitcoin (BTC) as its official currency in September 2021. Its latest statement on El Salvador was released on Feb. 10 and was panned by the crypto community. The fund has also urged the adoption of greater crypto regulation.

The IMF looks at central bank digital currency more favorably than cryptocurrency. It announced in September that it was working on an interoperable CBDC platform.