Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.
IMF Warns of Further Crypto Sales and More Coins Failing – Markets & Prices Bitcoin News
A director of the International Monetary Fund (IMF) has warned of further selling of both crypto-assets and stocks. He further warned that several crypto tokens could fail.
IMF predicts more crypto selling pressure
Tobias Adrian, Director of Monetary and Capital Markets for 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 selling, both in crypto-assets and in risky asset markets, such as stocks.
“There could be further failures in some of the coin offerings – particularly some of the algorithmic stablecoins that have been hit the hardest, and there are others that could fail,” he detailed. The IMF director also expects crypto to fall further amid a 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 runs, something both Treasury Secretary Janet Yellen and the Federal Reserve have also warned about.
Speaking about tether (USDT) in particular, the IMF chief stressed: “There is some vulnerability there because they are not backed one-to-one.” He noted that some stablecoins are “backed by somewhat risky assets,” and emphasized, “it is certainly a vulnerability that some of the stablecoins are not fully backed by cash-like assets.”
Nevertheless, Adrian does not see an immediate threat on the lines of the 2008 financial crisis, saying:
What was very worrying in the 2008 crisis was that the banks were very exposed to the shadow banks and we don’t see this exposure of banks to shadow banks through crypto at the moment.
Furthermore, the IMF director noted that regulations are needed to protect investors and the financial system. Noting the large number of cryptocurrencies in existence, Adrian opined:
Regulating the coins themselves is going to be difficult, but regulating the entry points like exchanges and wallet providers to invest in these coins, that is something that is very concrete and very doable.
The IMF also published a report on Tuesday that said: “Crypto assets have experienced a dramatic selloff that has led to heavy losses in crypto investment vehicles and caused failures in algorithmic stablecoins and crypto hedge funds, but spillovers to the broader financial system have been limited so far.”
What do you think of the IMF director’s comments? Let us know in the comments section below.
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