The International Monetary Fund (IMF) has mentioned how crypto assets could create “new vulnerabilities” in the global financial system in their newly-released World Economic Outlook: Challenges To Steady Growth.
Overall, the IMF writes in the Outlook how global growth for 2018-2019 is projected to remain in line with figures from 2017. However, it points out how these positive trends have becoming increasingly unbalanced, and might have even peaked for some leading economies.
Challenges Caused By Financial Tensions
The IMF makes a quick note about crypto assets in a section dedicated to financial tensions.
Specifically, the authors write how:
continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.
Just above this line, a point is made about how cyber attacks and digital breaches against important financial infrastructure “represent an additional source of risk” because they could undercut cross-border payments and stifle the flowing of goods and services.
The IMF also lists a number of other factors that can lead to a sharp shift in global financial conditions. These include turmoil inside nations, general political tensions, and regulatory actions.
Trying To Come To Grips With Cryptocurrency
International agencies have been trying to settle upon their approaches to cryptocurrencies, particularly as they continue to grow in popularity. Based on some of their recent activity, the IMF appears to be taking a more measured approach.
In early September, CryptoGlobe reported on the release of a 58-page report by the IMF warning the Marshall Islands not to move forward on launching a cryptocurrency.
It says using a cryptocurrency as a second legal tender “would increase macroeconomic and financial integrity risks.”
In June, an official at the IMF published an article warning central banks to keep a close eye on cryptocurrency competition. Executive Dong He says central banks must “continue to carry out effective monetary policies” to fend off potential competition.