IMF working paper proposes country-level assessment matrix for crypto risks
A working paper published by the International Monetary Fund (IMF) proposed a count vulnerabilities and potential policy responses for the crypto sector.
On Sept. 29, the IMF published a working paper titled “Assessing Macrofinancial Risks from Crypto Assets.” Within the paper, authors Burcu Hacibedel and Hector Perez-Saiz proposed a crypto-risk assessment matrix (C-RAM) for countries to spot indicators and triggers of potential risks in the sector. The matrix also aims to summarize regulators’ potential responses to the risks it could identify.
The matrix includes a three-step approach. The first step includes using a decision tree to assess crypto macro criticality or the potential to affect the macro-economy. The next step involves looking at indicators comparable to those used to monitor the traditional financial sector. The last step covers the global macro-financial risks affecting countries’ systemic risk assessment.
For example, the authors applied C-RAM to identify risks in El Salvador, a country that made Bitcoin (BTC) a legal tender in September 2021. According to the paper, El Salvador’s use of BTC poses market, liquidity and regulatory risks. The authors wrote:
“The use of crypto assets in El Salvador could also be assessed as macrocritical as recent regulatory and legal changes entail the risk of substantial cryptoization in the country, undermining financial stability and affecting large remittances and other capital inflows.”
The IMF has consistently discouraged El Salvador from adopting Bitcoin. In January 2022, the IMF urged the Central American country to drop Bitcoin’s legal tender status. According to the IMF, using BTC as legal tender carries “large risks” in areas such as financial stability, financial integrity and consumer protection.
Related: IMF’s CBDC push gets feedback from the crypto community — ‘No one wants this’
As crypto rapidly develops, regulators are playing catch up on putting in place responses to potential risks in the nascent space. On Sept. 7, the IMF and the Financial Stability Board collaborated on a joint paper containing policy recommendations, at the request of the Indian G20 presidency. The paper combined standards and consolidated recommendations for various risks associated with activities in crypto.
Magazine: Bitcoin’s ‘Great Accumulation,’ Binance.US resumes fiat withdrawals, and other news: Hodler’s Digest
South Korea’s National Tax Service warned that cold wallets are not beyond its reach, as it will conduct home searches to combat tax evasion.
The World Transformed, a left-wing political festival, has historically ran alongside the Labour Party Conference as an unofficial fringe event.
But a lot has changed since it began in 2016, organised then by the Corbyn-backed group Momentum. And like the former Labour leader himself, TWT has gone independent.
From Thursday to Sunday, a programme of politics, arts and cultural events will be held in Manchester, a week after Labour’s annual party gathering ended.
“It no longer made any sense to be a fringe festival of the Labour conference,” Hope Worsdale, an organiser since 2018, tells Sky News. “We need a space for the independent left to come together.”
This decision was made before the formation of Your Party in July and the surge of support behind the Greens and its new leader Zack Polanski, but both these factors have given TWT some extra momentum. Organisers say it is not just a festival, but a “statement of intent from the British left” – and a left that looks different from how it used to.
Previous headline speakers were Labour MPs in the left-wing Socialist Campaign Group, and in 2021, the showstopper was American democrat Bernie Sanders calling in live for an event alongside John McDonnell.
The World Transformed, previously headlined left-wing Labour MPs
Bernie Sanders and John McDonnell in conversation at TWT in 2021
This year, Mr Polanski, Jeremy Corbyn and Zarah Sultana are the only British politicians due to speak at events – though Brian Leishman, who lost the Labour whip in the summer, is also scheduled on a panel.
TWT was put on pause last year for organisers to reflect upon its role going forward, after Sir Keir Starmer’s election victory.
In 2021, 2022 and 2023, while he was leader of the opposition, the festival was able to “co-exist” with Labour as a space for activists on the left to discuss ideas.
But the prime minister’s “shift to the right” has alienated so many of those grassroots members that it was felt TWT’s core audience would no longer be at Labour Party conferences, says Hope, who joined Labour in the Corbyn years and has since left.
TWT in 2016. Pic: TWT
Event at TWT in 2023
“Our official position isn’t that Labour is dead and no one should engage with it,” she says.
“But they have shifted the values of Labour so radically since the last election, broken promise after promise, attacked civil liberties… there’s been such a suite of terrible decisions that mean people who are generally progressive and generally left wing feel like they have to take their organising elsewhere.”
So what’s on the cards?
There will be 120 events held in Hulme, Manchester, from Thursday to Sunday evening.
At the heart of the programme is daily assemblies, which organisers say are “designed to hold genuinely constructive debates about what we should do and how we should do it”.
But there’s just as much partying as there is politics – Dele Sosimi and his Afrobeat Orchestra are headlining the Saturday night slot while a “mystery guest” will host what TWT calls its “infamous” pub quiz on Friday night.
Back in 2018 that was Ed Miliband’s job, when 10,000 activists were expected to attend TWT. This year, organisers anticipate around 3,000 people will gather, but those involved insist this is a real chance for the left to strategise and co-ordinate, given the involvement of over 75 grassroots groups, trade unions, and activist networks.
Collaboration ‘vital’
A key question the left will need to address is how it can avoid splitting the vote given the rise of the Greens, socialist independents and the formation of Your Party,
One activist from the We Deserve Better organisation, which is campaigning for a left-wing electoral alliance and will be at TWT this weekend, acknowledged collaboration is “vital” if the left is to make gains under Britain’s first-past-the-post system.
Jeremy Corbyn at TWT. Pic: Reuters
But it remains to be seen whether Your Party co-leaders Mr Corbyn and Ms Sultana can even work together following their public spat last month, let alone with other parties. The pair put on a united front at a rally in Liverpool on the eve of TWT, when Sultana said she was “truly sorry” and promised “no more of that”. But will the truce last?
“It’s not ideal”, says the activist. “Hopefully they are back on track…a lot of collaboration is happening at the grassroots and we need to make sure it’s formalised so we can beat Labour and the right, we need to put on united front.”
They point to seats like Ilford North, where Health Secretary Wes Streeting clung on by a margin of just 528 votes in the general election, after a challenge from British-Palestinian candidate Leanne Mohamad, who ran in protest against Labour’s stance on Gaza.
Meanwhile, in Hackney, the Greens are hoping to gain their first directly elected mayor next May, with the Hackney Independent Socialist Group of councillors throwing their weight behind the party’s candidate, Zoe Garbett.
The We Deserve Better activist says Labour’s “hostile war on the left” has made these areas ripe for the taking, and what is more important than party affiliation is galvanising momentum behind one candidate who shares socialist values on issues like public ownership and immigration – be they the Greens, independents, or Your Party.
“The World Transformed reflects a general reorientation of the left outside of Labour. If they are taking these places for granted, we are going to win. If we unite as the left then we can win even bigger. Bring it on.”
Is Labour in danger?
There is some cause for Labour to be worried. It is haemorrhaging votes to both the right and the left after a tumultuous first year in office (13% to Reform UK, 10% to the Greens and 10% to the Lib Dems, according to an Ipsos poll in September).
Many Labour MPs feel the prime minister has spent too much energy trying to “out Reform Reform” with a focus on immigration, and he needs to do more to win back moderate and progressive voters that will be gathering at TWT this weekend.
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Starmer’s ‘anti-Reform party’ gamble
One fed-up MP told Sky News it was a shame TWT had decided to branch away from Labour, but not a surprise.
“This was something that was on the cards for a while, a parting of the ways, it’s another thing to show what’s happening with the direction of the party.”
He said in previous years the festival “was full of people for the first time in their life who were excited about politics and had a leadership looking at how it could challenge the biggest issues in our country”.
“Debates could be heated but it was always a place for intellectual discussion and that inside the Labour Party is now dead.”
But he said the party ultimately had bigger things to worry about than TWT, with a budget round the corner and potentially catastrophic local elections in May.
“I don’t think it will keep Keir Starmer or Morgan McSweeney up at night.”
The Irish Communications Interception and Lawful Access Bill is still in development, with drafting yet to occur, but the Global Encryption Coalition wants it scrapped now.
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