December 15, 2021
The International Monetary Fund (IMF) has warned about risks surrounding crypto especially in developing countries and advised that coordinated action has to be put in place by global standards.
“Determining valuation is not the only challenge in the crypto ecosystem: Identification, monitoring, and management of risks defy regulators and firms. These include, for example, operational and financial integrity risks from crypto asset exchanges and wallets, investor protection, and inadequate reserves and inaccurate disclosure for some stable coins. Moreover, in emerging markets and developing economies, the advent of crypto can accelerate what we have called ‘cryptoisation’ – when these assets replace domestic currency, and circumvent exchange restrictions and capital account management measures,” IMF said in a blog.
It also said that capital flow management may need to be fine-tuned due to digital currencies.