Russia Sanctions Could Spur Use of Crypto: IMF's Gopinath

A top International Monetary Fund official called for international regulation of digital finance, predicting "the adoption of digital finance, from cryptocurrencies to stablecoins and central bank digital currencies" following the unprecedented sanctions on Russia after its invasion of Ukraine.

• Gita Gopinath, the first deputy managing director at the IMF, made the comments in an interview with the Financial Times published Thursday.
• Gopinath said that "all of these will get even greater attention following the recent episodes, which draws us to the question of international regulation." She advocated for a coordinated approach to fill a gap in international regulation.
• Measures imposed by western countries on Russia "could encourage the emergence of small currency blocs based on trade between separate groups of countries," she said.
• While the dollar may become less dominant in the international financial system, it will remain the major global currency, even if fragmented, according to Gopinath.
• Gopinath's comments reiterate the stance taken by the IMF last year, when it outlined the need for a global approach to crypto regulation. A blog post from December stated the need for a “comprehensive, consistent and coordinated” approach in order to harness the benefits of crypto’s underlying technology while mitigating some of its risks.