Update (Sept. 7, 2023, 11AM UTC): This article has been updated to add more information on the policy paper.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have published a joint paper containing policy recommendations at the request of the Indian G20 presidency. The organizations have created the paper to combine the standards and consolidate collective recommendations to provide guidance and help various jurisdictions address risks associated with crypto asset activities.
The policy paper includes recommendations for regulating activities related to stablecoins and decentralized finance (DeFi). It also describes how regulatory frameworks and policies developed by both the IMF and the FSB can interact and fit together. However, it does not set or establish new policies, recommendations or expectations for relevant authorities.
According to the paper, stablecoins which are created with the intention of holding a stable value can abruptly become volatile and hold a huge risk to financial stability. Meanwhile, when it comes to DeFi protocols, the paper argued that while the processes used to provide DeFi services may be different from traditional financial platforms, DeFi “does not differ substantially from the tranditional financial system in the functions it performs.”
The paper also noted that as DeFi attempts to replicate some functions of the traditional financial system, it also may amplify and inherit the risk and vulnerabilities in traditional systems. This may include liquidity and maturity mismatches, operational fragilities, interconnectedness and leverage. The paper wrote:
“Claims of decentralisation often do not hold up to scrutiny. Presently, DeFi may exhibit unclear, opaque, untested or easy-to-manipulate governance frameworks that may expose users to risks.”
The report also reaffirmed the IMF’s stance about a blanket ban on crypto. On June 22, the IMF pointed out that banning crypto may not be effective in the long run. The IMF said that instead of banning crypto, various authorities should focus on addressing what drives the demand for crypto, including the consumers’ needs for digital forms of payment.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
More from Politics
Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.