Edited by: Wang Yuelong, Du YuAccording to a report by Fox Business News on February 24th, cited by CCTV Finance on February 25th, the International Monetary Fund (IMF) has formulated a nine point action plan on how countries should treat cryptocurrency assets. The most important point is to "maintain currency sovereignty and stability by strengthening the monetary policy framework,Do not grant cryptocurrencies such as Bitcoin official or legal tender status
Edited by: Wang Yuelong, Du Yu
According to a report by Fox Business News on February 24th, cited by CCTV Finance on February 25th, the International Monetary Fund (IMF) has formulated a nine point action plan on how countries should treat cryptocurrency assets. The most important point is to "maintain currency sovereignty and stability by strengthening the monetary policy framework,Do not grant cryptocurrencies such as Bitcoin official or legal tender status.
Other measures include preventing excessive capital flow, adopting clear tax rules and laws on crypto assets, and establishing and regulating regulatory requirements for all crypto market participants. The International Monetary Fund has stated that several cryptocurrency exchanges have gone bankrupt in the past few years and it is now necessary to take action.
Image source: Visual China - VCG21156924488
According to Pengpai News, on February 23 local time, the official website of the International Monetary Fund released a press release stating that the Executive Board of the International Monetary Fund has evaluated a report titledEffective Policy Elements for Cryptographic AssetsThe document (hereinafter referred to as the "Document") and agree to the proposed policy framework and elements in the document.
The document was prepared by IMF staff on January 4th and reviewed by the IMF Executive Board on February 8th. The document aims to solve the problems of IMF member states on how to deal with the expansion of crypto assets and related risks, and proposes a framework consisting of nine policy elements (or policy actions), involving macro finance, law, regulation and international coordination, to provide guidance for member states to formulate appropriate policies on crypto assets.
Effective Policy Elements for Cryptographic Assets
In the "Document", the 9 policy elements for encrypted assets are:
By strengthening the monetary policy framework to maintain monetary sovereignty and stability, and not granting the status of official currency or legal tender to cryptocurrency assets;
Preventing excessive fluctuations in capital flows and maintaining the effectiveness of capital flow management measures;
Analyze and disclose financial risks, and adopt clear tax treatment for encrypted assets;
Establishing legal certainty for encrypted assets to address legal risks;
Develop and implement prudential, behavioral, and supervisory requirements for all crypto market participants;
Establish a joint encryption regulatory framework for different national institutions and governments;
Establish international cooperation arrangements to strengthen supervision and enforcement of encryption asset regulations;
Monitor the impact of cryptocurrency assets on the stability of the international monetary system;
Strengthen global cooperation, develop digital infrastructure, and develop alternative solutions for cross-border payments and finance.
The IMF Executive Board emphasizes that,At present, significant potential risks to encrypted assets have emerged,This includes macroeconomic risks, monetary policy effectiveness risks, capital flow volatility risks, and fiscal risks. In particular, the widespread adoption of encrypted assets may undermine the effectiveness of monetary policy, bypass capital flow management measures, and exacerbate a country's fiscal risks. In the long run, the widespread adoption of Bitcoin may also have a significant impact on the international monetary system.
According to CoinGecko data, the current total market value of cryptocurrencies is $1.14 trillion, with Bitcoin accounting for 40.3% of the market value. A report from Crypto.com shows that global cryptocurrency holders increased by 39% in 2022 compared to 2021.The total number of cryptocurrency holders has increased from 306 million at the end of 2021 to 425 million at the end of 2022.
According to multiple reports such as Forbes, Columbia Climate School and the official website of the White House, the annual total power consumption of cryptocurrency is between 12 and 240 billion kilowatt hours. This exceeds the electricity demand of major countries such as Argentina and Australia. From a monetary perspective, this number represents a higher GDP than a small country (such as the Bahamas). Bitcoin blockchain remains the largest consumer, consuming over 161 terawatt hours in 2022 alone.
As of press release, Bitcoin was trading at $23063.4, a decrease of 3.72%. Ethereum closed at $1599.32, a decrease of 3.12%, while Gougou Coin fell 3.91%.
Image source: Yingwei Finance Official
Bitcoin time-sharing chart. Source: Yingwei Caiqing
According to COIN data, in the past 24 hours, $170 million in funds have evaporated (approximately RMB 1.22 billion), with a total of 50000 people selling out.
Edit|Wang Yuelong, Du Yu, Du Hengfeng
Proofreading|Lu Xiangyong
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