IMF urges regulators to act against cryptocurrencies over financial stability risks

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The International Monetary Fund (IMF) has urged regulators around the world to take action against cryptocurrencies due to the multitude of risks they entail for financial stability, according to one of the analytical chapters of its ‘Global Financial Stability Report’, published this Friday.

The organism has explained that the high growth of the «cryptoactives» presents both opportunities and challenges. “For emerging markets and developing economies, increased use of crypto assets has some benefits, but also macro-financial risks, especially with regard to asset and currency substitution,” he says.

The Fund has warned that many of the entities that have emerged around cryptocurrencies (exchange houses, wallets, mining or issuers) have a notorious absence of risk prevention and good operational and governance practices. In addition, users run the risk of losses due to failures in the use of their services or by, directly, theft through account hacking.

Although these types of incidents have not had a significant impact on financial stability, should crypto assets continue to gain public notoriety, their importance in terms of potential implications for the economy will increase.

‘Regulators and supervisors have to be able to monitor rapid ecosystem developments crypto and the risks it creates by tackling data breaches ”, has prescribed the IMF. Likewise, it has also urged governments to improve their cross-border coordination and to implement “global standards” on financial risks for these types of entities and assets.

Reduces the capacity of central banks

On the other hand, although the adoption of cryptocurrencies by citizens may have certain benefits, it also reduces the capacity of central banks to effectively implement monetary policy and involves solvency and financing risks.

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The Fund, citing data from ‘CoinGecko ‘, has warned that since the appearance of cryptocurrencies, 16,000 different currencies have been created, but that only 9,000 are currently active. The rest have stopped having active volumes or their developers have abandoned them. Some were even created for the mere purpose of speculation or even with the intention of fraud.

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