IMF Says Crypto Boom Poses Challenges to Financial Stability
The organization says more regulation is needed.
The International Monetary Fund (IMF) said more regulation is needed as the burgeoning cryptocurrency industry poses a number of challenges and risks to financial stability.
- The industry suffers from a lack of robust operational, governance and risk practices, according to a blog post on the organization’s website.
- Those shortcomings put consumers at risk, the authors wrote, suggesting that some crypto tokens that have failed to survive were “likely created solely for speculation purposes or even outright fraud.”
- “The (pseudo) anonymity of crypto assets also creates data gaps for regulators and can open unwanted doors for money laundering, as well as terrorist financing,” they wrote.
- The authors highlighted this month’s Global Financial Stability Report, another IMF report that describes in detail a number of the risks posed by the unregulated cryptocurrency market.
- The adoption of crypto assets is also difficult to measure, and it is possible that emerging markets and developing economies may be leading the way.
- Regulators worldwide need to act together on crypto to take action that will allow “the benefits to flow but, at the same time, also address the vulnerabilities.”
Read more: The IMF’s Self-Serving Case Against Bitcoin
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