The chief economist of the International Monetary Fund (IMF) said the regulation is “absolutely important” for the crypto industry. She added that banning cryptocurrencies, like what India might consider doing, would pose practical problems given their decentralized nature.

IMF Chief Economist on Cryptocurrency and its Regulation

Gita Gopinath, Chief Economist of the International Monetary Fund (IMF) would have discussed cryptocurrency on Wednesday at an event hosted by the National Council for Applied Economic Research (NCAER).

Gopinath is also an economic adviser to the IMF and director of its research department. She is on leave from public service in the Economics Department at Harvard University where she is John Zwaanstra Professor of International Studies and Economics. Gopinath is expected to be the IMF’s first deputy managing director early next year.

She said:

It seems that cryptocurrencies are more attractive to emerging markets than to developed economies.

Noting that “cryptocurrencies are a particular challenge for emerging markets,” she added, “emerging markets have exchange rate controls, capital flow controls and cryptocurrencies can have a impact on that “.

Gopinath added:

Regulation is absolutely important to this industry. If people are using it as an investment asset, the rules that exist for other categories of investment should apply here as well.

She added that banning cryptocurrencies would pose practical challenges, given their decentralized nature, underscoring the need for a global cryptocurrency policy.

Last week, the IMF presented some recommendations on how cryptocurrency should be regulated, noting that there is an urgent need for cross-border collaboration and cooperation in cryptocurrency regulation. The authors said, “Crypto assets are changing the international monetary and financial system in profound ways.”

The IMF also warned El Salvador in November against using bitcoin as a national currency. The country made bitcoin legal tender alongside the US dollar in September and bought 1,370 bitcoins for its cash.

What do you think of the comments of the chief economist of the IMF? Let us know in the comments section below.

Kevin helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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