Ayman Alsayari Warns of Dangers and Risks of Cryptocurrencies
Ayman Alsayari, the Governor of the Saudi Central Bank (SAMA), has expressed concerns about the potential dangers and risks associated with cryptocurrencies and their brokers. Speaking at the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in Morocco, Alsayari called for strong supervision and regulation of digital assets to combat these risks.
“We need good supervision, regulation, and coordination of cryptocurrency activities. In this context, we support the work and relevant roadmap of the IMF and the Financial Stability Board to address risks related to cryptocurrencies.”
Alsayari’s remarks come after the International Monetary Fund (IMF) and global financial regulators set a roadmap in September to coordinate measures against cryptocurrencies undermining financial stability. The IMF and the Financial Stability Board (FSB) released a paper suggesting licensing crypto service providers and implementing anti-money laundering and counter-terrorist financing standards.
Global Economy Faces Slump due to Inflation Rates
In addition to his concerns about cryptocurrencies, Governor Alsayari also highlighted the drastic slump in the global economy caused by rising inflation rates.
“Tight monetary policies are being adopted around the world to bring down inflation. As a result, the global growth rate is expected to be around three percent this year and next.”
IMF Crypto Roadmap Unveiled at G20 FMCBG Meeting
The G20 FMCBG meeting held in Marrakech, Morocco, also unveiled the G20 Roadmap for regulating crypto assets and reforming multilateral development banks (MDBs). This detailed roadmap aims to foster global policy and regulations for cryptocurrencies while considering the implications on Emerging Markets and Developing Economies (EMDEs).
The Financial Stability Board recommended implementing regulations instead of imposing an outright ban on digital assets. The G20 communique emphasized the importance of the roadmap in achieving macro-economic and financial stability, as well as ensuring effective implementation of a comprehensive policy framework for crypto assets.
Hot Take: Increased Supervision and Regulation are Crucial for Cryptocurrencies
Ayman Alsayari’s warning about the dangers and risks of cryptocurrencies highlights the need for increased supervision and regulation in the digital asset space. As the popularity and use of cryptocurrencies continue to grow, it is essential to address potential risks to macroeconomic and financial stability.
The IMF’s roadmap, along with the support of global financial regulators, aims to coordinate measures to combat these risks. By implementing licensing requirements for crypto service providers and enforcing anti-money laundering standards, authorities can mitigate potential threats posed by cryptocurrencies.
Furthermore, as inflation rates rise and impact the global economy, tight monetary policies become necessary. However, striking a balance between controlling inflation and promoting economic growth remains a challenge for policymakers.
Overall, a comprehensive policy and regulatory response is crucial to ensure the safe and responsible use of cryptocurrencies while maintaining global financial stability.
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