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

Tanzeel Akhtar is a reporter based in London,UK.

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.”
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Tanzeel Akhtar is a reporter based in London,UK.

Tanzeel Akhtar is a reporter based in London,UK.

Trending

1
Morgan Stanley Warns NFTs Next to Watch After UST Collapse, Bukele Announces Mega Banks Meeting in El Salvador

The most valuable crypto stories for Monday, May 16, 2022.

The most valuable crypto stories for Monday, May 16, 2022.

2
First Mover Asia: Metaverse ETFs Are Underperforming Gaming ETFs; Cryptos Return to the Red

Public interest continues to grow about the metaverse, but not as much in metaverse ETFs. Does crypto belong in everything?

Public interest continues to grow about the metaverse, but not as much in metaverse ETFs. Does crypto belong in everything?

3
Coinbase Expands Features, Allowing Some App Users to Access Ethereum-Based Dapps

The move will let Coinbase users purchase NFTs, trade on decentralized exchanges and borrow and lend on various DeFi platforms.

The move will let Coinbase users purchase NFTs, trade on decentralized exchanges and borrow and lend on various DeFi platforms.

4
S&P Global Ratings Forms DeFi Group to Build Out Crypto Framework

The credit rating giant named Charles "Chuck" Mounts as chief DeFi officer to lead the unit.

The credit rating giant named Charles "Chuck" Mounts as chief DeFi officer to lead the unit.