The International Monetary Fund’s (IMF) Financial Stability Board has pitched in on the crypto conversation arguing that its rapid adoption could pose new threats to the global economy.
In its Global Financial Stability Report, released earlier this week, the IMF said that the quick adoption of digital currencies and stablecoins could pose risks to countries' macroeconomic and financial stability and go on to have a broader impact on the global economic order.
As the crypto space has expanded and evolved, it said, it has also invited new sources of risk, specifically it mentioned stablecoins and decentralized finance (DeFi).
One issue the IMF highlighted was the lack of transparency and distribution of tokens coined this way and the various operational risks associated with it, such as outages or extreme volatility.
The IMF continued: “So far, losses as a result of such risks have not had a significant impact on financial stability, globally or domestically. However, as crypto assets grow, the macro-criticality of such risks is likely to increase”.
The institution has repeatedly spoken about the risks of rapid stablecoin adoption. The IMF refused to assist El Salvador with its roll-out of Bitcoin (BTC) as a legal tender and repeatedly warned about the dangers of this move.
However, it sought to establish new guidelines for developing economies that are faced with the temptation to adopt blockchain and crypto at a rapid pace.
Meanwhile, the IMF's managing director, Kristalina Georgieva, has been accused of skewing data in favor of China.