Is the IMF changing its generally negative tune on Bitcoin and crypto? Maybe, judging by a new report. OR… is it just looking for a softer way of attempting to control the narrative?

The International Monetary Fund’s report, titled “Regulating Crypto: The right rules could provide a safe space for innovation” was published in the UN agency’s September edition of its online Finance & Development magazine.

“Crypto assets have been around for more than a decade, but it’s only now that efforts to regulate them have moved to the top of the policy agenda,” the report describes, adding:

“It’s only in the past few years that crypto assets have moved from being niche products in search of a purpose to having a more mainstream presence as speculative investments, hedges against weak currencies, and potential payment instruments.”

It seems like refreshingly positive stuff from a highly influential global agency that hasn’t exactly emitted the greatest vibes towards crypto in the past.

In fact, at times, it’s been downright hostile, for instance leaning on Argentina to “discourage” the use of crypto as a condition of a US$45 billion IMF loan (per CoinDesk’s “Why is the IMF so Afraid of Cryptocurrency?“). Not to mention urging El Salvador, the first country to adopt Bitcoin as legal tender, to remove BTC’s legal tender status.

Yes, former IMF head (now European Central Bank boss) Christine “Cryptocurrency is Worth Nothing” Lagarde did once speak quite glowingly about the future of digital currencies. But that was 2017 and her opinion on the asset class seems to have taken a complete, Jim Cramer-like 180 since then.


Why regulate? And why the IMF believes it’s a challenge

The report makes indirect reference to the “crypto contagion” borne from the Terra LUNA and Three Arrows Capital fiasco, as well as dramatically sliding crypto valuations in general this year, pointing to these things as “impetus to the push to regulate”.

It also, however, acknowledges the difficulty countries face in regulating this nascent industry…

“Applying existing regulatory frameworks to crypto assets, or developing new ones, is challenging for several reasons,” writes the IMF. Some of those reasons include:

• “The crypto world is evolving rapidly.”

• “Regulators are struggling to acquire the talent and learn the skills to keep pace given stretched resources and many other priorities.”

• “Monitoring crypto markets is difficult because data [is] patchy, and regulators find it tricky to keep tabs on thousands of actors who may not be subject to typical disclosure or reporting requirements.”

Seems’s Fred Schebesta was bang on the money, for instance, when he told Stockhead it might take a quite a while for the Australian government to put well-considered and effective crypto regulations in place.

The IMF report then noted the contrasting national approaches to crypto regulation and made another “global response” call-out, which it’s been banging on about for a while now. But it added some softener into the wash with words like “safe space” and “innovation”.

“The regulatory fabric is being woven, and a pattern is expected to emerge,” wrote the IMF authors. “But the worry is that the longer this takes, the more national authorities will get locked into differing regulatory frameworks.

“This is why the IMF is calling for a global response that is coordinated… consistent… and comprehensive…

“A global regulatory framework will bring order to the markets, help instil consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue,” concluded the report.

All in all, not the absolute worst from the IMF, then. That said, you can probably guess how much the decentralisation-loving, wide world of crypto loves the idea of a “global regulatory framework” working hand in hand with central banks…