United States Treasury Secretary Janet Yellen emphasized the importance of implementing a strong regulatory framework for cryptocurrencies during the G20 meeting on February 25.
Speaking to Reuters, Yellen said it was “critical to create a strong regulatory framework.” He also noted that the United States is not recommending an “outright ban on crypto activities.”
Yellen’s comments followed earlier from International Monetary Fund (IMF) Managing Director Kristalina Georgieva, stating that banning crypto should be an option:
“There should be a strong push for regulation … if regulation fails, if you slow down, then we shouldn’t remove the table that bans these assets, because it could put financial stability at risk.”
In addition, Georgieva pointed out to journalists that it is necessary to distinguish the digital currency of the central bank (CBDC) from stablecoins and cryptocurrencies – which are issued by private companies.
Related: What are CBDCs? A beginner’s guide to central bank digital currencies
At the previous conference, the G20 meeting of Finance Ministers and Central Bank Governors (FMCBG) under the presidency of India focused on financial stability and regulatory priorities, Cointelegraph reported.
The country’s Finance Minister Nirmala Sitharaman called for a coordinated global policy to address the macro-financial implications of crypto assets. Sitharaman has historically supported cooperation with other jurisdictions in the development of crypto regulations. For years, the Indian government has debated whether to regulate or even ban cryptocurrencies.
On February 23, the IMF issued an action plan on crypto assets, asking countries to remove the status of legal tender for cryptocurrencies. The paper, titled “Elements of Effective Policy for Crypto Assets,” outlines a framework of nine policy principles that address macrofinancial, legal and regulatory, and international coordination issues.
After a visit to El Salvador earlier this month, the IMF advised the country to reconsider its plans to increase exposure to Bitcoin, citing cryptocurrency risks for El Salvador’s fiscal sustainability and consumer protection, as well as financial integrity and stability.