IMF: Growing cryptocurrency adoption poses financial stability challenges

89

The rapid development and growing adoption of crypto assets represent a threat to financial stability, according to the latest Global Financial Stability Report by the International Monetary Fund (IMF) published on October 1.

Indeed, three IMF officials, Dimitris Drakopoulos, Fabio Natalucci, and Evan Papageorgiou, stated in a chapter of the report titled “The Crypto Ecosystem and Financial Stability Challenges” that as crypto assets gain traction, authorities must step up their efforts to protect investors.

The IMF commented:

Despite potential gains, the rapid growth and increasing adoption of crypto assets also pose financial stability challenges.

They added:

In emerging markets, the advent of crypto assets has benefits but can accelerate cryptoisation and circumvent exchange and capital control restrictions. Increased trading of crypto-assets in these economies could lead to destabilizing capital flows.

Source