thecoinrise.com
On Tuesday, the International Monetary Fund (IMF) said that it believes the ongoing crypto market turmoil has not affected global financial stability.
While a recent report published by IMF acknowledges that the “dramatic selloff” in the crypto market has “led to large losses in crypto investment vehicles and caused the failure of algorithmic stablecoins and crypto hedge funds,” it believes that the situation has not affected the broader financial system so far.
IMF highlighted the factors that affected the financial stability
The IMF went on to add that factors that actually affected the stability of the broader global financial system. It mentioned higher-than-anticipated global inflation, slower-than-expected economic decline in China, and more negative spillovers from the conflict between Russia and Ukraine to have hammered the world economy that was already struggling from the COVID-19 pandemic.
In a keynote address last month, the chairman of the Federal Reserve in the United States, Jerome Powell, also carried similar views. He stated that the central bank was “not really seeing significant macroeconomic implications so far” in relation to the recent volatility of cryptocurrencies.
In October 2021, as TheCoinRise reported, IMF released a new set of policies that aimed to reduce the financial risks associated with the crypto market boom. The new policies were also intended to help the developing nations and emerging markets to fight financial instability and ease their crypto adoption.
IMF has always shown a strict stance toward the crypto industry and called for a clear set of regulations in emerging economies. Despite its tough attitude toward the market, IMF chief Gita Gopinath agreed that the organization does not have the authority to ban the sector.
At a hearing in May, the Secretary of the United States Treasury, Janet Yellen, brought up the controversy surrounding Terra’s UST tokens and restated her position calling for improved regulation of cryptocurrencies, including stablecoins. Recently, U.S. lawmakers postponed the Stablecoin Bill, citing several unsettled topics in the bill.