World financial regulators and the International Monetary Fund (IMF) have developed a roadmap to develop measures that will prevent cryptocurrency from undermining macroeconomic and financial stability. This is reported by Reuters.

Among the main risks of decentralized finance (DeFi) is non-compliance with existing laws in some cases. That said, many of the benefits of cryptocurrencies, such as cheaper and faster cross-border payments and increased financial accessibility, have yet to materialize

“Widespread adoption of cryptoassets could undermine the effectiveness of monetary policy, circumvent capital flow measures, exacerbate fiscal risks, divert resources available to finance the real economy, and jeopardize global financial stability,” the report said.

The paper also outlines a timeline for IMF and G20 members to implement the latest recommendations on cryptocurrency regulation from the Financial Stability Board and the Global Securities Regulators Group.

“Comprehensive policies and regulatory measures for cryptoassets are necessary to address the risks posed by cryptocurrencies to macroeconomic and financial stability,” the document states.

The U.S. will take on DeFi regulation

In July, the U.S. Senate introduced a new bill that would impose stringent anti-money laundering (AML) requirements for DeFi protocols.

The paper notes that the initiative was created to combat the rise of cryptocurrency-related crime and cut off the opportunity to evade money laundering and sanctions measures that are critical to national security.

Regulation of cryptocurrencies in Europe

Europe has made further progress in crypto regulation by passing MiCA (Market in Crypto Assets) laws. The legislation is expected to come into force next year and will help facilitate the entry of cryptocurrency companies into the European market.

Many countries welcomed the EU’s decision to introduce cryptocurrency regulation. In particular, the U.S. admitted that it could take MiCA as a model when creating its own cryptocurrency regulations.

By Linda

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