Financial stability

Financial stability challenges increase with the popularity of the crypto market, IMF warns

Financial stability challenges increase with the rise in the popularity of the crypto market, IMF (International Monetary Fund) warns the whole world. Central banks will not be able to implement monetary policy and financial stability risks can also be created, IMF added in a published article.

The crypto market has surpassed the market value of $2 trillion in September 2021. This rise of decentralized market is a message from the common people that how much irritated they are about everything being controlled. The rise of the crypto market has alarmed many institutions which keep an eye on and secure financial stability around the globe. IMF is one of those institutions which are worried about the situation and has stated it publicly. previously IMF has showed its concern through artilcles and blogs.

Financial stability
Source: Tweeter

Financial stability challenges by crypto market:

IMF has published a blog on Friday written by three writers named Dimitris Drakopoulos, Fabio Natalucci, and Evan Papageorgiou. The title of the post was “Crypto boom poses new challenges to financial stability”. They explained that crypto lacks in risk, governance, and operational practices.

The writer highlighted that the rapid adoption of crypto can pose significant threats by reinforcing dollarization forces in the economy or this case cryptoization. The authors stressed the capability of crypto in tax evasion which can pose threat to the fiscal policy. They described as:

 Cryptoization can reduce the ability of central banks to effectively implement monetary policy. It could also create financial stability risks.

The authors also provide suggestions like “regulators and supervisors need to be able to monitor rapid developments in the crypto ecosystem and the risks they create by swiftly tackling data gaps.” They further added that cross-border coordination should be increased for better supervision and enforcement.

The global standards must be kept in mind while regulating the crypto and cross-border payments must be made faster and cheaper through the G20 payments roadmap

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About mnmansha

MN Mansha is a cryptocurrency expert, trader, and content writer with extensive experience in covering everything related to digital assets — from price analysis to Blockchain disruption. Mansha authored 100+ stories for NewsBSC.com and other fintech media outlets and he's actively writing more every day. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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