IMF presented an analysis of vulnerabilities and potential regulatory responses to the digital asset sector in a working paper.
In the document, experts proposed a crypto-risk assessment matrix (C-RAM) for countries to identify indicators and triggers of potential threats in the industry. The tool also aims to summarize possible regulatory responses to identified issues.
The matrix involves a three-step approach:
- the first step involves using a decision tree to assess the potential impact on the macroeconomy;
- the next one involves studying indicators comparable to those used to monitor TradFi;
- the latter covers global macro-financial risks that influence the assessment of systemic threats.
As an example, the authors applied C-RAM to El Salvador. They concluded that Bitcoin legalization created market risks, liquidity risks, and regulatory risks.
“The impact can be assessed as critical, since the decision entailed the threat of significant “cryptoization” in the country, undermining financial stability and affecting large remittances and other capital inflows,” – the document says.
Earlier, IMF specialists admitted that the risks of Bitcoin legalization by El Salvador “did not materialize” due to the “limited” distribution of digital assets. Employees of the organization have repeatedly criticized the authorities’ decision.
Let us recall that in September, G20 member countries approved the recommendations of the Financial Stability Board and the IMF on the regulation, supervision and control of cryptocurrencies.
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