World governments should not grant cryptocurrency legal tender status, the International Monetary Fund’s (IMF) executive board said in its new nine-point action plan on how countries should approach crypto assets published Thursday.

“Directors generally agreed that crypto assets should not be granted official currency or legal tender status in order to safeguard monetary sovereignty and stability,” the statement said, urging countries to strengthen and clarify crypto tax policy and align with international standards.

Earlier this month, the IMF’s 24 directors, who are elected by the organization’s member countries, were presented with a staff paper that warned of crypto’s risks to monetary policy, tax collection, financial stability, and consumer protection.

According to the plan, banning crypto is “not the first-best option,” and regulators should avoid stifling the innovation coming from the industry. However, directors agreed that targeted restrictions could apply to limit crypto risks, while some board members thought “outright bans should not be ruled out.”

(By DYLAN BUTTS)

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