Economists at the International Monetary Fund (IMF) stated that “crypto assets are no longer on the fringes of the financial system.” Moreover, they “could soon pose a risk to financial stability, especially in countries where cryptocurrencies are widely adopted.”
“Our analysis shows that crypto assets are no longer on the fringes of the financial system”
The International Monetary Fund (IMF) published a blog post on Tuesday warning of the risks crypto assets pose to financial stability. The authors of this article are three economists in the IMF’s Monetary and Capital Markets Department: Tobias Adrian, Tara Iyer, and Mahvash S. Qureshi.
“Crypto-assets like Bitcoin have grown from an obscure asset class with few users to an integral part of the digital asset revolution, raising concerns about financial stability,” the IMF post described.
Our analysis shows that cryptoassets are no longer on the fringes of the financial system. Given their relatively high volatility and valuations, their increased co-movement could soon pose risks to financial stability, especially in countries with widespread cryptocurrency adoption.
“Therefore, it is time to adopt a comprehensive and coordinated global regulatory framework to guide national regulation and mitigate financial stability risks from the crypto ecosystem,” they wrote.
Three other staff in the IMF’s Monetary and Capital Markets Department had a similar situation warn Last October, about the risks that cryptoassets pose to financial stability. Dimitris Drakopoulos, Fabio Natalucci and Evan Papageorgiou elaborate: “Cryptocurrencies reduce the ability of central banks to effectively implement monetary policy. It can also create financial stability risks.”
However, the Fed is not concerned that crypto will harm the country’s financial system.In December, Federal Reserve Chairman Jerome Powell fired Cryptocurrencies as financial stability issues, but warned they were risky because “they are not backed by anything.”
Meanwhile, the Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, warned in November that cryptocurrencies are Getting closer Due to the rapid growth of the industry, it poses a threat to global financial stability.
What do you think of the IMF economists’ analysis? Let us know in the comments section below.
Image Source: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for reference only. It is not a direct offer or an invitation to buy or sell, nor is it a recommendation or endorsement of any product, service or company. Bitcoin Network Does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned herein.