International Monetary Fund (IMF) chair Kristalina Georgieva said the crash of Terra’s algorithm stablecoin UST should not make people ditch cryptocurrencies. She made this statement during the World Economic Forum’s annual meeting on Tuesday. Kristalina Georgieva believes that the crypto market is essential as it gives faster service, is much cheaper, and has more involvement.
During the World Economic Forum’s annual meeting held in Davos, Kristalina Georgieva encourages investors not to ditch the crypto market in spite of the crash of Terra’s UST and LUNA as not all digital currencies are similar,
“I would beg you not to pull out of the importance of this world. It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas.”
The IMF’s Chair, Kristalina Georgieva feels that every investment asset comes with some kind of risks, as well as cryptocurrencies. Hence, Stablecoins supported by cash and other assets vary from stablecoins backed by algorithms. Stablecoins are cryptocurrencies that are meant to keep a 1:1 peg with reserve assets such as the US Dollar.
The crash of algorithm stablecoin TerraUSD or UST incurred massive liquidation across the crypto market. This should serve as a lesson for investors to dodge such risky assets that are less supported. Hence, investors should keep on investing in cryptocurrencies.
Kristalina Georgieva also encourages regulators worldwide to guard investors through crypto regulations and education. She cautioned against confusing crypto products with currencies.