IMF warns of further cryptocurrency sell-offs and failure of new coins – Bitcoin News markets and prices

IMF warns of further cryptocurrency sell-offs and failure of new coins – Bitcoin News markets and prices

The director of the International Monetary Fund (IMF) has warned of further sell-offs in both crypto assets and stocks. He further warned that more crypto tokens could fail.

The IMF predicts more pressure on the sale of cryptocurrencies

Tobias Adrian, Director of Monetary and Capital Markets at the International Monetary Fund (IMF), warned of further selling pressure in the crypto market and more crypto token failures in an interview with Yahoo Finance on Wednesday.

He said:

We could see further sell-offs, both in crypto assets and in risky asset markets, such as stocks.

“There could be further failures of some coin offerings – particularly some of the algorithmic stablecoins that have been hardest hit, and there are others that could fail,” he detailed. The IMF director also expects cryptocurrencies to fall further amid the recession.

In May, cryptocurrency terra (LUNA) and stablecoin terrausd (UST) imploded, prompting SEC Chairman Gary Gensler to warn that many crypto tokens will fail.

Adrian also warned of the potential for fiat-backed stablecoins to experience a run, something Treasury Secretary Janet Yellen and the Federal Reserve have also warned against.

Speaking of tether (USDT) in particular, the executive director of the IMF emphasized: “There is a certain vulnerability because they are not supported one-to-one.” He noted that some stablecoins are “backed by somewhat risky assets”, pointing out, “certainly the vulnerability is that some of the stablecoins are not fully backed by assets like cash”.

However, Adrian does not see an immediate threat on the level of the 2008 financial crisis, stating:

What was very concerning in the 2008 crisis was that banks had a lot of exposure to shadow banks, and we don’t currently see that exposure of banks to shadow banks through cryptocurrencies.

Moreover, the IMF director noted that regulations are needed to protect investors and the financial system. Noting the huge number of cryptocurrencies in existence, Adrian said:

Regulating the coins themselves will be difficult, but regulating entry points such as exchanges and wallet providers to invest in those coins is something that is very concrete and very doable.

The IMF also released a report on Tuesday stating: “Crypto assets have experienced a dramatic sell-off that has led to large losses in crypto-assets and caused the failure of algorithmic stablecoins and crypto hedge funds, but the spillovers to the broader financial system have so far limited.”

What do you think about the IMF director’s comments? Let us know in the comments section below.

IMF warns of further cryptocurrency sell-offs and failure of new coins – Bitcoin News markets and prices

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects, and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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