Hello dear readers, may this opportunity serve to share with you the recent statements that the International Monetary Fund (IMF) called for greater regulation of Africa's cryptocurrency markets, an element that evidently arises as a result of recent negative events that have arisen in the market.
According to information disclosed in Cointelegraph the IMF is calling for stricter regulation of cryptocurrencies in Africa as the sector develops, this following the collapse of FTX which has undoubtedly been one of the reasons why countries in the region should adopt regulation, the organization noted.
Among the reasons why countries in the region should adopt regulation, the monetary fund cited the collapse of FTX and its ripple effect on cryptocurrency prices, which is "prompting renewed calls for greater consumer protection and regulation of the cryptocurrency industry."
Furthermore, the authors argue that "the risks of cryptoassets are evident" and "it is time to regulate" to find a balance between minimizing risk and maximizing innovation. Based on the October 2022 Regional Economic Outlook for Sub-Saharan Africa.
The aforementioned article states that "the risks are much greater if a cryptocurrency is adopted as legal tender," posing a threat to public finances if governments accept cryptocurrencies as a means of payment.
In textual terms the article reads as follows; "Policymakers are also concerned that cryptocurrencies could be used to transfer funds illegally out of the region and to circumvent local regulations preventing capital outflows. The widespread use of cryptocurrencies could also undermine the effectiveness of monetary policy, creating risks to financial and macroeconomic stability."
I would like to know your opinion on this position taken by the IMF.
Cointelegraph. IMF calls for tighter crypto regulation in Africa as the industry unfolds. Link
The cover image was designed by the author: @lupafilotaxia, incorporating image: Umaizi.