The International Monetary Fund (IMF) has issued its report
on developments within the financial technology (Fintech) industry.
They placed particular focus on the rapidly growing cross-border payments industry.
They placed particular focus on the rapidly growing cross-border payments industry.
The report offers recommendations on how to effectively
regulate distributed ledger technology (DLT) and the digital currencies
that use it.
IMF Recommendations
In its report, the IMF highlights that:
“New technologies may require jurisdictions to revise rules governing ownership and contractual rights and obligations.”
The organization has recommended tighter know-your-customer (KYC) guidelines and regulatory oversight. The IMF advises that such regulation will deter money laundering, tax evasion and terrorist financing.
They also suggested that there be a discussion on how to
balance privacy and transparency considerations, which the IMF believes
will aid consumer adoption of DLT and virtual currencies.
Summary:
A new wave of technological innovations, often called “fintech,” is accelerating change in the financial sector. What impact might fintech have on financial services, and how should regulation respond? This paper sets out an economic framework for thinking through the channels by which fintech might provide solutions that respond to consumer needs for trust, security, privacy, and better services, change the competitive landscape, and affect regulation. It combines a broad discussion of trends across financial services with a focus on cross-border payments and especially the impact of distributed ledger technology. Overall, the paper finds that boundaries among different types of service providers are blurring; barriers to entry are changing; and improvements in cross-border payments are likely. It argues that regulatory authorities need to balance carefully efficiency and stability trade-offs in the face of rapid changes, and ensure that trust is maintained in an evolving financial system. It also highlights the importance of international cooperation.
Source: https://cointelegraph.com/news/imf-issues-recommendations-on-regulating-distributed-ledger-technology
Summary:
A new wave of technological innovations, often called “fintech,” is accelerating change in the financial sector. What impact might fintech have on financial services, and how should regulation respond? This paper sets out an economic framework for thinking through the channels by which fintech might provide solutions that respond to consumer needs for trust, security, privacy, and better services, change the competitive landscape, and affect regulation. It combines a broad discussion of trends across financial services with a focus on cross-border payments and especially the impact of distributed ledger technology. Overall, the paper finds that boundaries among different types of service providers are blurring; barriers to entry are changing; and improvements in cross-border payments are likely. It argues that regulatory authorities need to balance carefully efficiency and stability trade-offs in the face of rapid changes, and ensure that trust is maintained in an evolving financial system. It also highlights the importance of international cooperation.
Source: https://cointelegraph.com/news/imf-issues-recommendations-on-regulating-distributed-ledger-technology
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