The International Monetary Fund released a new blog to warn the regulators and investors over crypto adoption which can cause risks for the financial system.
The International Monetary Fund raised their issues against crypto many times and also warned the global financial regulators to take suitable and rapid action on this growing market of crypto. When El Salvador’s president proposed & passed the Bitcoin law to adopt bitcoin as legal tender then the IMF also indirectly criticized the decision of Nayib Bukele over Bitcoin adoption and stated that there are huge risks because of adoption of crypto as legal tender and it may collapse the economy of the country.
On 1 October, a blog published by the International Monetary Fund. Through the blog, the IMF claimed that regulators needed to take action in this initial stage. Fabio Natalucci, Dimitris Drakopoulos and Evan Papageorgiou are authors of the published blog.
Authors of the blog described crypto adoption as “cryptoization” and said that it is a much harder thing (crypto adoption) to implement under the monetary policy system.
First of all, the IMF said that problems with time will increase. In the present time there are no huge problems associated because of the volatility but there are huge chances that in future it will lead to a big problem.
So the IMF claimed that with the adoption of crypto, problems will also arise at a high level.
This is not the first time, when the IMF talked about the crypto adoption as a negative impact for the investors and financial system. Before this, they raised many concerns on crypto like Cyber Crimes, money laundering and tax evasion, as well as energy consumption.
Earlier this, One of the economist of IMF claimed that regulators needed to take action in this initial stage and added
“The global nature of crypto assets means that policymakers should enhance cross-border coordination to minimize the risks of regulatory arbitrage and ensure effective supervision and enforcement”