Banking and insuranceEconomical

The global dangers of booming illegal cryptocurrencies


According to the Guardian, the International Monetary Fund has stated that fraud is more likely despite financial instability and financial terrorism unless the government tightens control. The Washington-based International Monetary Fund said a 10-fold increase in the market value of cryptocurrencies, including digital or virtual currencies, to more than $ 2 trillion by early 2020 would require active and participatory government oversight.

The International Monetary Fund said in a chapter of its forthcoming Global Financial Stability Report that many new cryptocurrencies lack strong oversight. The authors of this chapter, in a blog, said that cryptocurrency exchanges have experienced significant disruptions during periods of market turmoil. There have also been several cases of theft involving the hacking of customer funds. To date, these events have not had a significant impact on financial stability, however, as the value of cryptocurrency assets increases, their importance in terms of potential economic consequences increases.

This blog mentions significant risks for consumers from improper monitoring, given that some currencies may have been created for blatant fraud. The anonymity of (pseudo) cryptocurrency assets also creates a rift for regulators and can inadvertently lead to money laundering as well as terrorist financing. The International Monetary Fund (IMF) has also pointed out potential problems, despite a fourfold increase in the supply of cryptocurrencies valued at $ 120 billion (میلیارد 88 billion) against the US dollar by 2021. Given the reserves of these currencies, some stable coins may have a negative impact on the financial system.

Last month, China outlawed trading in cryptocurrencies, but the International Monetary Fund said emerging and developing countries appeared to be leading the way. This undermines the ability of central banks to effectively implement monetary policy and potentially poses risks to financial stability.

The International Monetary Fund (IMF) said that in the first instance, regulators and monitors should be able to monitor rapid developments in the cryptographic system and their risks with a swift response. The global nature of encrypted assets means that policymakers need to increase coordination to minimize legal arbitrage risks and ensure effective oversight and enforcement.

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