{
  "title": "Virtual Currencies and Beyond: Initial Considerations",
  "publication": "Staff Discussion Notes, January 20, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/virtual-currencies-and-beyond-initial-considerations-43618",
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  "summary": "New technologies are driving transformational changes in the global financial system. Virtual currencies (VCs) and the underlying distributed ledger systems are among these. VCs offer many potential benefits, but also considerable risks.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Authors: Dong He, Karl F Habermeier, Ross B Leckow, V. Haksar, Yasmin Almeida, Mikari Kashima, Nadim Kyriakos-Saad, Hiroko Oura, Tahsin Saadi Sedik, Natalia Stetsenko, Concha Verdugo Yepes\n- Publication date: January 20, 2016\n- Series: Staff Discussion Notes No. 2016/003\n- Issue: 003\n- Pages: 42\n- DOI: https://doi.org/10.5089/9781498363273.006\n- Stock No: SDNEA2016003\n- ISBN: 9781498363273\n- ISSN: 2617-6750"
    },
    {
      "heading": "Summary of main points",
      "content": "- New technologies, including virtual currencies (VCs) and distributed ledger systems, are driving transformational changes in the global financial system.\n- VCs offer potential benefits such as raising efficiency and, in the long run, strengthening financial inclusion.\n- VCs also pose considerable risks, including being potential vehicles for money laundering, terrorist financing, tax evasion and fraud.\n- Given the very small scale of VCs at the time of writing, risks to the conduct of monetary policy seem less likely to arise at this stage.\n- Risks to financial stability may eventually emerge as the new technologies become more widely used.\n- National authorities have begun to address these challenges and will need to calibrate regulation to appropriately address risks without stifling innovation.\n- As experience is gained, international standards and best practices could provide guidance and promote harmonization and cooperation across jurisdictions."
    },
    {
      "heading": "Key risks identified",
      "content": "- Money laundering\n- Terrorist financing\n- Tax evasion\n- Fraud\n- Potential future risks to financial stability as adoption scales"
    },
    {
      "heading": "Potential benefits highlighted",
      "content": "- Increased efficiency in payments and financial services\n- Strengthened financial inclusion over the long run"
    },
    {
      "heading": "Policy considerations and recommendations",
      "content": "- Calibrate regulation to appropriately address risks while avoiding stifling innovation.\n- Monitor developments to assess when risks to monetary policy and financial stability might materialize as scale increases.\n- Consider international standards and best practices, as experience is gained, to guide regulatory responses across different fields and promote cross-jurisdictional harmonization and cooperation.\n- National authorities should continue to address AML/CFT concerns in the context of VCs."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Banking, Blockchain and DLT, Crime, Currencies, Money, Technology, Virtual currencies\n- Keywords: AML/CFT, Anti-money laundering and combating the financing of terrorism (AML/CFT), blockchain, Blockchain and DLT, capital flows management, consumer protection, cryptocurrencies, Currencies, distributed ledger, exchange controls, fiat currency, financial efficiency, financial inclusion, financial innovation, financial regulation, financial stability, financial system, Global, international cooperation, market participant, monetary policy, payment technology, SDN, tax evasion, unit of account, VC scheme, Virtual currencies\n\nStaff Discussion Note: \"Virtual Currencies and Beyond: Initial Considerations\", Staff Discussion Notes 2016, 003 (2016), January 20, 2016.\n\n---\n\n Content in this bundle\n\n- sdn1603\n  - sdn1603 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - sdn1603 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/virtual-currencies-and-beyond-initial-considerations-43618"
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    "Authors: Dong He, Karl F Habermeier, Ross B Leckow, V. Haksar, Yasmin Almeida, Mikari Kashima, Nadim Kyriakos-Saad, Hiroko Oura, Tahsin Saadi Sedik, Natalia Stetsenko, Concha Verdugo Yepes",
    "Published: January 20, 2016",
    "Series: Staff Discussion Notes",
    "DOI: https://doi.org/10.5089/9781498363273.006",
    "Authors: Dong He, Karl F Habermeier, Ross B Leckow, V. Haksar, Yasmin Almeida, Mikari Kashima, Nadim Kyriakos-Saad, Hiroko Oura, Tahsin Saadi Sedik, Natalia Stetsenko, Concha Verdugo Yepes",
    "Publication date: January 20, 2016",
    "Series: Staff Discussion Notes No. 2016/003",
    "Issue: 003",
    "Pages: 42",
    "DOI: https://doi.org/10.5089/9781498363273.006",
    "Stock No: SDNEA2016003",
    "ISBN: 9781498363273",
    "ISSN: 2617-6750",
    "New technologies, including virtual currencies (VCs) and distributed ledger systems, are driving transformational changes in the global financial system.",
    "VCs offer potential benefits such as raising efficiency and, in the long run, strengthening financial inclusion.",
    "VCs also pose considerable risks, including being potential vehicles for money laundering, terrorist financing, tax evasion and fraud.",
    "Given the very small scale of VCs at the time of writing, risks to the conduct of monetary policy seem less likely to arise at this stage.",
    "Risks to financial stability may eventually emerge as the new technologies become more widely used.",
    "National authorities have begun to address these challenges and will need to calibrate regulation to appropriately address risks without stifling innovation.",
    "As experience is gained, international standards and best practices could provide guidance and promote harmonization and cooperation across jurisdictions.",
    "Money laundering",
    "Terrorist financing",
    "Tax evasion",
    "Fraud",
    "Potential future risks to financial stability as adoption scales",
    "Increased efficiency in payments and financial services",
    "Strengthened financial inclusion over the long run",
    "Calibrate regulation to appropriately address risks while avoiding stifling innovation.",
    "Monitor developments to assess when risks to monetary policy and financial stability might materialize as scale increases.",
    "Consider international standards and best practices, as experience is gained, to guide regulatory responses across different fields and promote cross-jurisdictional harmonization and cooperation.",
    "National authorities should continue to address AML/CFT concerns in the context of VCs.",
    "Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Banking, Blockchain and DLT, Crime, Currencies, Money, Technology, Virtual currencies",
    "Keywords: AML/CFT, Anti-money laundering and combating the financing of terrorism (AML/CFT), blockchain, Blockchain and DLT, capital flows management, consumer protection, cryptocurrencies, Currencies, distributed ledger, exchange controls, fiat currency, financial efficiency, financial inclusion, financial innovation, financial regulation, financial stability, financial system, Global, international cooperation, market participant, monetary policy, payment technology, SDN, tax evasion, unit of account, VC scheme, Virtual currencies",
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