Three reasons the IMF is concerned about cryptocurrencies – Economy –

The International Monetary Fund is concerned about cryptocurrencies, especially since the nascent market is growing at a significant rate and regulations are not keeping up.

The total market value of all crypto assets surpassed $ 2 trillion in September this year, a ten-fold increase from the level in early 2020, according to data compiled by the IMF.

Evan Papageorgiou, deputy director of the IMF department, told CNBC in October that “the cryptocurrency ecosystem has grown tremendously… The process has shown remarkable resilience, but there have been some interesting stress tests. “

One of the issues highlighted by the IMF is that many individuals and financial institutions that trade these assets “lack sound risk management, governance, and operating practices.”

As a result, the Fund said that consumers are at risk, adding that there is simply “insufficient disclosure and oversight” in this area. Furthermore, he believes that crypto assets create certain “data breaches” and “may open unwanted doors for money laundering and terrorist financing.” “

Other institutions have called for additional measures to make these investments safer. Cryptocurrencies can be divisive, with some claiming they represent the future of money and others making more skeptical arguments about their risks.

Cryptocurrency influencers
UK financial regulator FCA has warned of the link between social media and crypto investments.

Scammers regularly pay social media influencers to help them pump up and dump new tokens based on pure speculation. Some influencers are promoting pieces that turn out not to exist at all, ”said Charles Randell, president of the FCA, in a speech in September.

He added that given the novelty of this technology, “we have not seen what happens during the financial cycle. We just don’t know when or how this story will end, but, like any new speculation, it may not end well. “

Kim Kardashian, a celebrity with more than 200 million followers on Instagram, was paid earlier this year to advertise cryptocurrencies on her account. Critics have pointed out how few details are known about the developers of ethereummax, the coin they were advertising. “This is not financial advice, but rather to share what my friends told me about the Ethereum Max Token!” “Kardashian’s post read. She added several hashtags, including #ad, which is necessary to reveal that her post is paid for.

Other social media users with a large following, called influencers, also advertised cryptocurrencies on their accounts.

“Cryptocurrencies are often advertised alongside these posts that display this glamorous lifestyle, and I think this association is very dangerous and harmful to young people,” Myron Jobson, a personal finance expert at Interactive Investor, told CNBC in October. .

He said lawmakers should look at advertising for cryptocurrencies and make sure they explain to people the risks associated with investing in such a volatile asset. Prices can fluctuate a lot, even during a single trading day.

Another problem for policy makers is that this market is of great interest to young people, who often invest in cryptocurrencies for the first time and use loans and credit cards to do so.

Figures released by the FCA in June showed that around 2.3 million people in the UK own cryptocurrencies. Of these, 14% use credit to buy them and 12% believe that the FCA will protect them if something goes wrong. However, the FCA has said it will not protect them.

A July survey of 1,000 UK adults aged 18-29 found that 27% used a credit card to invest in the cryptocurrency meme dogecoin, 17% used their student loan and 12% said they had used other types of loans.

This could become a double-edged sword, as investors could suffer losses on their cryptocurrencies and then struggle to repay the loans and credits they have obtained for those investments.

According to the IMF, national regulators should strive to establish common rules globally, strengthen cross-border surveillance and, as this is a very recent area, promote data standardization.

“Time is running out and action must be decisive, swift and well coordinated globally to reap the benefits but also address vulnerabilities,” the IMF said in October.

Rank Math Seo Pro Weadown, Wordfence Premium Nulled, Yoast Nulled, PHP Script, Fs Poster Plugin Nulled, Astra Pro Nulled,Woodmart Theme Nulled, Wpml Nulled, Avada 7.4 Nulled, Woodmart Theme Nulled, PW WooCommerce Gift Cards Pro Nulled, Elementor Pro Weadown, Newspaper – News & WooCommerce WordPress Theme, Nulledfire, Slider Revolution Nulled, Elementor Pro Weadown, Jnews 8.1.0 Nulled, WeaPlay, Business Consulting Nulled, WP Reset Pro, Newspaper 11.2, Flatsome Nulled, Woocommerce Custom Product Ad, Premium Addons for Elementor, Jannah Nulled, Consulting 6.1.4 Nulled, Plugins, WordPress Theme, Dokan Pro Nulled

Back to top button