Governor of Saudi Central Bank Calls for IMF Oversight of Cryptocurrencies

Ayman Alsayari, the governor of the Saudi Central Bank (SAMA), is advocating for the International Monetary Fund (IMF) to take a role in overseeing the cryptocurrency industry.

During a recent event in Marrakech, Morocco, where the IMF Annual Meetings were held from October 9-15, Alsayari emphasized the importance of effective supervision, regulation, and coordination in the realm of cryptocurrencies. He expressed support for the IMF’s efforts, along with the Financial Stability Board, in addressing the risks associated with cryptocurrencies.

According to the Saudi Gazette, the G20 Roadmap, unveiled at the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting, includes plans for more stringent regulation of cryptocurrency activities.

The G20 Roadmap’s objectives involve coordinating international policies, devising risk-mitigation strategies, and regulating various aspects of the cryptocurrency market.

The IMF is also advocating for reforms within the cryptocurrency space to promote global economic stability, particularly in the context of the ongoing Israel-Hamas conflict.

Governor Alsayari’s comments come at a time when there are concerns about a slowing global economy and high inflation rates. World leaders are increasingly pushing for tighter monetary policies worldwide, and the G20 roadmap is viewed as a valuable tool for addressing the potential threats that cryptocurrencies may pose to financial stability.

This economic instability has led to a revised global economic forecast of 2.9% in 2024, with further adjustments anticipated due to the escalating conflict in the Middle East between Israel and Hamas. The G20 roadmap has prompted and is expected to prompt different governments to reevaluate their approaches to cryptocurrencies. For instance, India is considering moving away from an outright ban and instead considering cryptocurrency regulation following IMF-FSB guidelines.

Historically, various calls for the regulation of digital assets indicate the interest of traditional financial institutions and regulators in reshaping the cryptocurrency landscape into something they can comprehend and manage. This has proven challenging, as the cryptocurrency space encompasses a wide range of characteristics.

Given the IMF’s assertion that cryptocurrency adoption presents a risk to financial stability, the publication of the IMF’s Central Bank Digital Currency (CBDC) handbook, along with the growing global interest in CBDCs and the regulatory roadmap, is expected to lead to a more regulated cryptocurrency environment. This anticipation may encourage more governments to move away from banning digital assets and, instead, align with this global guideline to govern their usage.

This shift is likely to increase cryptocurrency adoption but may also transform them into something quite different from what we currently see in the ecosystem. The effectiveness of this guidance will become evident over time.

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