The International Monetary Fund (IMF) said more regulation is needed as the burgeoning cryptocurrency industry poses a number of challenges and risks to financial stability.
- The industry suffers from a lack of robust operational, governance and risk practices, according to a blog post on the organization’s website.
- Those shortcomings put consumers at risk, the authors wrote, suggesting that some crypto tokens that have failed to survive were “likely created solely for speculation purposes or even outright fraud.”
- “The (pseudo) anonymity of crypto assets also creates data gaps for regulators and can open unwanted doors for money laundering, as well as terrorist financing,” they wrote.
- The authors highlighted this month’s Global Financial Stability Report, another IMF report that describes in detail a number of the risks posed by the unregulated cryptocurrency market.
- The adoption of crypto assets is also difficult to measure, and it is possible that emerging markets and developing economies may be leading the way.
- Regulators worldwide need to act together on crypto to take action that will allow “the benefits to flow but, at the same time, also address the vulnerabilities.”
Read more: The IMF’s Self-Serving Case Against Bitcoin