IMF allows the possibility of the continued decline of the cryptocurrency market
A spokesman for the fund said about the difficult situation in the field of stablecoins
28.07.2022 - 09:00
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What’s new? The International Monetary Fund (IMF) has warned that cryptocurrency markets could face further pressure from sellers and continue to fall. In an interview with Yahoo Finance, Tobias Adrian, Director of Monetary and Capital Markets for the IMF, said that if the United States goes into recession, digital asset rates will fall even further. In particular, he noted the difficult situation in the field of stablecoins.
What else did Adrian add? The IMF representative predicts difficulties in the fiat-backed stablecoin markets. He sees a vulnerability in the fact that many such projects are not backed by fiat at a 1:1 ratio. Adrian noted that some of these stablecoins are backed not only by fiat money but also by risky assets, which poses a threat to the entire project’s ecosystem.
Adrian also added that the market needs regulation to protect the interests of investors and the financial system itself. Compliance with securities laws and oversight of the global crypto infrastructure should be a priority for the relevant authorities, the IMF representative believes.
“There are 40 000 coins out there. Regulating the coins themselves is going to be difficult, but regulating the entry points such as exchanges and wallet providers to invest in those coins, that's something that is very concrete and very feasible,” Adrian added.
In May, Gita Gopinath, Deputy Managing Director of the IMF, described cryptocurrencies as an extremely risky asset class and noted that they need to be regulated. She noted the sharp decline in the capitalization of the crypto market, which makes digital assets very dangerous for investors and cannot be classified as a high-yield investment.
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