IMF: Cryptocurrencies Might Pose Risks to Global Financial System

The International Monetary Fund has issued its World Economic Outlook for October 2018.

IMF made notable warnings about cryptocurrency, and the impact it sees it might have on the international financial system.

In the details, the World Economic Outlook (WEO) report titled “Challenges to Steady Growth,” after 10 years from the collapse of Lehman Brothers and the start of the last global financial crisis.

In its April 2018 report, WEO predicted the global growth to rise to 3.9 % in 2018 and 2019, while it informs today that the outlook is “more tentative” as recent solid growth has “plateaued.”, attributing that to easing growth in emerging markets, trade conflict between the US and China, and lingering uncertainty from Brexit.

Reports estimate there are around $218 billion of global investment committed to investing into digital currencies, while the IMF does not offer further comment with regard to “crypto assets,” leaving the size of the risk open to interpretation.

The April 2018 report reads as well: “Crypto assets have features that may improve market efficiency, but they could also pose risks if used with leverage or without appropriate safeguards.”, claiming that “at present, crypto assets do not appear to pose macrocritical financial stability risks.”

Uncertainty which Wraps Cryptocurrency is Troublesome

IMF raised concerns over investments, referring to that cryptocurrency markets and the uncertainty that surrounds them is troublesome.

the IMF referred to that cybersecurity breaches and cyberattacks are impose a risk to financial infrastructure and that “continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

In her turn, IMF Managing Director Christine Lagarde had penned an official blog, under the headline of “An Even-handed Approach to Crypto-Assets.”, explaining that the IMF’s preliminary assessment confirmed that cryptocurrencies did not “pose an immediate danger” to fiat markets.

It is worth mentioning that the International Monetary Fund (IMF) is composed of 189 member countries that work for global monetary cooperation, financial stability, international trade, and sustainable economic growth., along with ensuring the stability of the international financial system.

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