Call from IMF and South Korea: Rapid Crypto Regulations Needed to Mitigate Risks

Crypto News – Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), made a powerful speech at a digital currency conference in Seoul, stressing the urgent need for crypto rules and infrastructure to fight the threats posed by the growing popularity of cryptocurrencies.

Call from IMF and South Korea: Rapid Crypto Regulations Needed to Mitigate Risks

Georgieva stressed the significance of creating strong frameworks without impeding advancement while acknowledging the possibilities for innovation. Regarding the unstable effects of unregulated cryptocurrencies on the stability of the global financial system, Georgieva issued a strong warning. She argues that the quick uptake of cryptocurrency assets can endanger macro-financial stability by interfering with capital flow management strategies, fiscal sustainability, and the transmission of monetary policy.

Georgieva highlighted taking the initiative and reaffirmed her commitment to creating a financial system that is more effective and interoperable. The goal is not to go back to a time before cryptocurrencies, but rather to create a framework that promotes innovation by reducing the risks associated with them through legislation and utilizing technology to enhance infrastructure. “Good rules can spur and guide innovation,” she said, highlighting the dual function that rules play in nurturing creativity. This is significant because it shows how committed the IMF is to promoting improvements in the digital financial world while maintaining a balance of oversight.

South Korea Also Takes Measures to Protect Users

On the other hand, South Korea is a major player in the global movement towards crypto safety. Kim So-young, the nation’s vice-top financial regulator, stressed the need for a balanced approach to cryptocurrency regulation that takes technological innovation and investor security into account. The declaration was made at the Seoul summit, which was co-hosted by the IMF, the central bank, and the government of South Korea.

Notably, the Virtual Asset User Protection Act, which is scheduled to go into force on July 19, 2024, has been given specific restrictions by the Financial Services Commission (FSC) in South Korea. These rules seek to uphold integrity in the virtual asset market and provide users with a safe environment.