Here’s Why IMF Is Anxious about Cryptocurrencies
In October, IMF's division Chief Evan Papageorgiou told CNBC that the crypto industry had witnessed remarkable growth. He stated that that indicates resilience, but the ecosystem has had some stress tests. IMF stressed that most individuals and financial sectors trading digital...
– IMF emphasized was that most platforms trading crypto-assets lack risk practices, governance, and top-notch operational.
– The Fud trusts consumers are not safe.
– Moreover, IMF stated that digital coins could open the doors for crimes line terrorist financing and money laundering.
The International Monetary Fund (IMF) is bothered about the new asset class, cryptocurrencies. That is due to the crypto industry’s high growth pace, while regulation appears behind. According to IMF data, cryptocurrency assets had their total market capitalization surpassing $2 trillion in 2021 September, translating to a ten-fold gain from figures recorded in 2020 January.
In October, IMF’s division Chief Evan Papageorgiou told CNBC that the crypto industry had witnessed remarkable growth. He stated that that indicates resilience, but the ecosystem has had some stress tests. IMF stressed that most individuals and financial sectors trading digital tokens are without massive risk practices, governance, and operations.
With that, the Fund believes crypto is a risk to consumers, adding that the space has inadequate oversight and disclosure. Moreover, it trusts that cryptocurrencies create ‘data gaps’ and might open doors for crimes such as terrorist financing and money laundering.
Several institutions have called for more actions to make the assets safer for investment. Indeed, the crypto market is a challenging topic as optimistic individuals see it overthrowing real cash, while skeptical discussions point to related risks.
UK’s financial regulator FCA warned about the relationship between cryptocurrency investment and social media. In September, the FCA chair stated that scammers pay social media platforms to aid them in pumping and dumping new assets with pure speculation. The chairman believed that some crypto influencers promote tokens that never existed.
Kim Kardashian received payments to advertise a digital coin to over 200 million followers on Instagram. Skepticism arose about the currency she posted, ethereummax, as critics questioned the little-known details about the developers.
IMF believes national watchdogs should have global rules for high supervision on the crypto market. Furthermore, most authorities want to regulate the industry to safeguard consumers from the anonymity of crypto nature.
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