(Finance) – The sanctions imposed by the US and the EU against Russia, following the invasion of Ukraine, rare likely to push various countries to create “parallel payment systems”, disengaged from current international circuits, to protect themselves from being affected, in turn, by any restrictions. This is what the director of the International Monetary Fund saidKristalina Georgieva speaking at a conference on the international monetary system, organized by the Swiss National Bank.
“The invasion of Russia into Ukraine caused not only terrible human suffering, but also a global economic shock and a sharp increase in the risk of a new cold war,” he said. Some countries may consider developing parallel payment systems and released, to mitigate the risk of potential economic sanctions. These payment blocks would only worsen the impact of larger economic blocks, creating new inefficiencies and imposing new costs “.
More generally, according to Georgieva it should be used “public digital platforms” in order to “modernize” payment systems between countries and reduce the risk of fragmentation. The international payment system, which allows you to change currencies and transfer capital flows between countries “is facing serious challenges “.
For the Director of the Monetary Fund, i cryptoassets allow you to operate in a “pseudo-anonymous” manner, without showing the holder’s country of residence, and also by exploiting regulatory gaps, they can hinder the control activities of the authorities, undermining the mechanisms for managing capital flows with foreign countries. And given the importance of managing capital flows and the possible repercussions of this segment, the Washington institution recommends a strategy articulated on several fronts. “In some countries – we read – crypto assets have become an important tool on payments and speculative investments, driven by macroeconomic, institutional and demographic factors. THE crypto asset they can be pseudo-anonymously traded and held without identifying the holder’s residence. Many crypto service providers operate across borders, making it more difficult for national authorities to supervise and enforce law. The IMF recalls that capital flows can bring substantial benefits to countries but also risks.
“In this sector, enforcing laws and rules and typically implies that financial intermediaries verify the nature of the transitions and the identities of the parties involved – we read – but on crypto assets all this faces growing challenges”. And “the challenges posed by crypto assets are compounded by the gaps in laws and regulatory systems, given that the legal status of crypto assets is often unclear and the rules on managing capital flows do not cover them”. For this reason, the IMF suggests a multi-level strategy to policy makers. Starting with “clarifying the legal status of crypto assets” and insuring “that they are framed in the rules and supervision of capital flows”.
Then it is necessary to “develop a comprehensive and coordinated legal approach regarding persons and entities engaged in activities and services on crypto assets”. Third, the IMF recommends “establishing international collaboration agreements for the supervision of crypto assets.” Fourth, it asks to intervene on the gaps that also concern data and technological systems “to create models for identifying anomalies and early warning indicators, which allow timely monitoring of the implementation of the rules on capital flows “.