IMF warns against crypto adoption, worries about global financial stability

The International Monetary Fund (IMF) recently a report published in which they denounce the development and adoption of the crypto ecosystem. According to the IMF, the rapidly growing adoption of crypto is a potential problem for the stability of the global financial system.

Global Financial Stability Report

In the report, three IMF officials, Fabio Natalucci, Dimitris Drakopoulos and Evan Papageorgiu, speak out about the potential effects of accelerated adoption of cryptocurrencies on the global monetary system.

In their view, it is critical that governments take short-term steps to protect investors. In addition, the rise of crypto is a threat to financial stability around the world, according to the IMF

According to the IMF, crypto can ensure that ‘capital flow’ goes beyond the supervision and control of government agencies. The IMF argues that this is problematic and could endanger the stability of the global economy.

However, the IMF also sees the great potential of the crypto industry. For example, the new and innovative technology offers the opportunity to overhaul the international payment system. Cross-border payments are becoming easier, faster and cheaper. Parts of the world where a central financial system is not yet the norm are connected to the rest of the world in this way.

Global regulation

The IMF argues that governments around the world must collude to set up far-reaching regulation of the crypto markets. Mostly stablecoins are seen as a threat to the global economy and, according to the IMF, countries around the world must agree on how they will deal with the existence of stablecoins.

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Finally, the IMF warns countries with a developing economy. Embracing cryptocurrencies as legal tender, such as El Salvador doing so recently could pose enormous dangers, according to the IMF. They are therefore very concerned that more countries will become the example of El Salvador.

It almost seems that the IMF wants the opposite of what most crypto investors would like to see. This is not surprising, of course, because many crypto platforms are, as it were, opposed to the established financial order of which the IMF is an embodiment.

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