‘Global Policy Ought To Be Prioritized Over A Blanket Ban’, Says IMF Chief Economist

The International Monetary Fund&39s Chief Economist, Gita Gopinath, recently stated that developing economies must avoid outlawing cryptocurrencies. Instead, she referred to global industrial regulation as a need that must take precedence. She has therefore recommended regulating the industry rather than introducing a complete ban, given the latter&39s practical problems associated with its real-life implementation.

Gita&rsquos comments are in line with the growing sentiment that the cryptocurrency sector has grown so much that a ban may in fact no longer be feasible. As such, numerous regulators and governmental authorities are actively moving towards heightened regulation instead.

&lsquoRegulations to be preferred over a ban&rsquo

Arguing for a worldwide strategy, Gita, who will shortly take over as the IMF&39s deputy managing director, warned that if several nations banned crypto in its entirety, they would lose control over various offshore exchanges which are not subject to the rules of their respective country. This, she added, would then perhaps lead to them being disregarded completely.

Furthermore, Gita explained that there are obstacles to fully banning crypto due to the fact that many exchanges are based overseas, which would make it difficult to implement a ban on a global scale. This once again has to do with the fact that not every nation would be subject to following the same rules of another country or regulatory authority.

The Chief Economist&39s statements come at a time when governments around the world are debating how to regulate cryptocurrencies. The People&39s Bank of China for example formally announced a number of new efforts to prevent cryptocurrency adoption within their country back in September, including increased inter-departmental collaboration in suppressing cryptocurrency-oriented activities. More recently, the Russian central bank had officially outlawed mutual funds from being able to invest in Bitcoin (BTC) earlier in December.

Crypto keeps growing

As aforementioned, the cryptocurrency industry continues to grow at an exponential rate. New tokens, protocols and projects are emerging seemingly every other day, and the current market capitalization of Bitcoin is $892,158,622,767.  With such unprecedented growth, many regulators are becoming increasingly worried that if left unchecked, the rapid expansion could have unforeseen consequences. However, many entities believe that this is only the beginning for cryptocurrency&rsquos dominance, as companies like Grayscale keep purchasing more BTC.