IMF department head and deputy managing director require quick regulatory measures to avoid crypto attachment to legacy finances-regulation

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Crypto infection risks of the International Monetary Fund of the IMF

A department head and deputy managing director of the International Monetary Fund (IMF) require more measures in the regulatory area to avoid that the heights and depths of crypto affect banks and traditional financial institutions. Nobuyasu Sugimoto, deputy department head of the financial supervisory and regulatory department of the IMF, and Bo Li, deputy managing director of the IWF, believe that the volatility of the cryptocurrency in view of the growing connections between legacy finance and crypto could bring systemic risks for the existing.

IMF blog contribution calls for the containment of future crypto attachment to

Volatility and instability of the cryptocurrency markets begin to worry supervisory authorities from all over the world. On January 18, Nobuyasu Sugimoto, deputy department head of the Financial Supervision and Regulation Department of the IMF, and BO Li, deputy managing director of the IMF, A article that warns of the effects that the volatility of the Cryptoma markets could have on the existing financial system.

The article states that the instability that has developed on the cryptoma markets as a result of the various collapse of tokens and stock exchanges could affect traditional markets and institutions in view of the current deepening of the connections between these two systems.

The regulation of these markets is one of the elements to prevent this, according to the authors, who also indicate that investors in developed markets due to the returns they offer flow into spectators to some of these assets. The IMF blog contribution says:

advanced economies are also susceptible to financial stability risks by crypto, since institutional investors have increased their stable coin stocks, attracted by higher returns in the previously low interest environment.

risks of substitution and cryptoization

While the IMF crypto and stable coins still not regarded as serious risks to the global financial system, some countries replace their currency with crypto and stable coins, which makes international control of these funds particularly difficult. For Sugimoto and Li, this situation has "the potential to cause capital outflows, a loss of monetary sovereignty and threats to financial stability and to create new challenges for political decision -makers".

This is to be seen economy In order to control these risks, the authors of the blog post recommend the establishment of global regulations for providers of services for virtual assets that force customer assets to separate from the stocks of these companies. In addition, stable coin emitters should be regulated heavily, and you are even advised to apply bank-like regulations depending on the size of the project. Experts have previously explained that a run on stablecoins could influence the US trasuries market.

also the worldwide implementation of the Basel committee guidelines Cryptocurrency can be exposed to banks at all times.

What do you think of the considerations of the authors of the IMF blog post on the infection risks of cryptocurrencies? Tell us in the comment area below.

Sergio Göschenko

sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game and entered the cryptosphere when the price increase took place in December 2017. He has a background as a computer engineer, lives in Venezuela and is affected by the cryptocurrency boom on a social level. It offers a different perspective on the crypto success and how it helps those who have no bank account and are under-supplied.

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