The International Monetary Fund’s Financial Stability Board said the growing adoption of cryptocurrencies could potentially increase risks to the global economy.
In its Global Financial Stability Report released on Tuesday, the International Monetary Fund, or IMF, he said that the adoption of cryptocurrencies and stablecoins in emerging markets and developing economies may pose a challenge to the macroeconomic and financial stability of these countries. The group said the risks are “contained for now,” but asked regulators to monitor cryptocurrencies and keep them under control.
The IMF added that as the cryptosphere expanded and evolved, “new sources of risk” were emerging, such as stablecoins and decentralized finance, or DeFi. Specifically, the group identified the hacking-risk space as having a “lack of transparency around the issuance and distribution” of tokens and operational risks, including outages during periods of extreme volatility. He also labeled “meme tokens” and centralization – a major exchange like Binance that handles a large amount of trading volume, while Tether is responsible for most of the stablecoin supply – as factors to consider.
“Until now, losses as a result of such risks have not had a significant impact on financial stability, globally or nationally,” said the IMF. “However, as cryptoactives grow, the macro-criticality of such risks tends to increase.”
Highlighting the risks of developing countries adopting digital assets is a common slogan for the IMF, with the fund having previously reported on the challenges of digital currencies and central bank stablecoins. The group alerted the Marshall Islands and El Salvador that recognizes a digital currency as legal currency it could “increase risks to macroeconomic and financial stability as well as financial integrity”.
Earlier this month, the IMF released a set of policies for emerging markets and developing economies to ensure financial stability amid the adoption of cryptocurrency on a global scale, given director Kristalina Georgieva’s assertion that more than half of all central banks in the world are exploring how to launch digital coins. The group’s recommendations included lawmakers “implementing global standards for cryptoactives and [aprimorando] its ability to monitor the cryptocurrency ecosystem, addressing data gaps.”
Direct your links to OKEx in articles, blogs and videos, or place an advertisement on your website. The best affiliate program is on OKEx with 60% commissions, the highest in the market.