Why IMF’s Worries About Cryptocurrencies

The International Monetary Fund is concerned about cryptocurrencies, chiefly because the promising market is growing at a noteworthy pace and regulation is not coping with such a pace.

The total market value of all crypto assets surpassed USD 2 trillion in September this year, representing a 10-fold jump from levels seen at the start of 2020, data collected by the IMF shows.

The crypto ecosystem has grown significantly. The process shows remarkable flexibility but there have also been some interesting stress tests.

One of the problems that the IMF highlighted is that many of the people and financial institutions trading crypto assets lack strong operational, governance, and risk practices.

As such, the Fund has said that consumers are at risk, adding that there is simply inadequate disclosure and oversight in this space. The IMF also believes crypto assets create some data gaps and can open unwanted doors for money laundering, as well as terrorist financing.

Other institutions have been calling for more action to make these investments safer. Cryptocurrencies can be a divisive topic, with some arguing that they are the future of money and others presenting more skeptical arguments about their risks.