IMF Says Crypto Boom Poses Challenges to Financial Stability

The organization says more regulation is needed.

Oct 1, 2021 at 3:05 p.m. UTC
Updated Oct 1, 2021 at 3:42 p.m. UTC

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.”

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Tanzeel Akhtar is a CoinDesk news reporter based in Europe.