IMF offers Andorra technical assistance in digital asset monitoring

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The International Monetary Fund (IMF) offered guidance to the tiny European nation of Andorra on digital asset monitoring, a new report has revealed.

The Technical Assistance Report for the Principality of Andorra delved into the IMF’s involvement in helping the country improve its balance of payment statistics. It touched on direct investment, currency in circulation, deposits and loans, insurance, reserve assets, and more.

Digital assets were also briefly discussed. The Andorran Financial Authority (AFA) noted that all financial institutions must obtain prior approval before engaging in digital asset activities. However, AFA revealed that no bank has requested this approval so far.

In its recommendation, the IMF urged the country to “keep monitoring transactions and positions of crypto assets with the AFA.” It assigned this responsibility medium priority and set a review deadline of September 2024.

Andorra, a tiny nation of around 80,000 nestled between Spain and France, passed its Digital Assets Act in 2022. The bill provided for developing a central bank digital currency
(CBDC) and categorized digital assets as financial instruments. However, it clearly outlined that digital assets aren’t legal tender and that only the euro can be used to settle payments in the country.

Andorran lawmakers followed up last year with a proposal to allow local businesses to launch their tokens. However, a few months later, they revised the bill to state that these tokens could only be used in small and specific closed ecosystems, such as ski resorts.

Local reports say lawmakers supporting digital assets have returned to the drawing board and plan to propose a revised bill that aggressively pushes for digital asset adoption.

Meanwhile, the IMF remains at the heart of the global digital asset regulation drive. Most recently, it’s pushing Pakistan to impose taxes on its ‘crypto’ traders as one condition for a $3 billion bailout.

It wants the South Asian nation to amend its Capital Gains Tax (CGT) framework to encompass ‘crypto,’ in line with a tactic it has relied on where it pushes for aggressive digital asset measures as prerequisites for financial assistance.

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