The International Monetary Fund (IMF) has given cryptocurrency the evil eye by warning the world that continued rapid expansion of crypto assets could make the financial sphere more vulnerable.
The remarks were made in World Economic Outlook which is a survey by the IMF usually published twice a year. It homes in economists’ analyses of global economic developments during the half-year period. The October 2018 edition was published two days ago.
‘Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the ﬂow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.’
Cryptocurrency has been on the radar of International Monetary Fund (IMF) for quite a long time now because of its potential to revolutionize financial sphere by decentralization of currency and blazing volatility capable of wiping off millions in a matter of seconds.
Take for instance Bitcoin, with price ballooning up to $19,000 in Dec 2017 and then suffering the crash that took it to $6,000 in days.
IMF has maintained a spectator view on crypto developments, weighing in and warning the world of the benefits and risks of cryptocurrency.
A blogpost titled “Addressing the Dark Side of the Crypto World”, published in March this year on IMF’s website has already expressed similar reservations to the ones World Economic Outlook has expressed regarding future of cryptocurrencies.
‘..money laundering and terrorist financing is only one dimension of the threat. Financial stability is another. The rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create new vulnerabilities.’
IMF has all the right reasons to doubt cryptocurrency and it’s role in laundering and terrorist financing. In a report published by Carbon Black, a security solution platform, a total of $1.1 billion were lost in cryptocurrency-related thefts during the first six months of 2018.
‘The available dark web marketplaces represent a $6.7 million illicit economy built from cryptocurrency-related malware development and sales.’
Cryptocurrency, the forebearer of financial freedom in modern world is still dragging the darkness of fraud and illicit trades with it. It comes down to us to use it for the welfare of humanity instead of destroying it. Although the projected results for economy growths calculated by IMF in the report aren’t good news but we still can hope and work harder to ascertain a nicer tomorrow.
‘Beyond the next couple of years, as output gaps close and monetary policy settings begin to normalize, growth in most advanced economies is expected to decline to potential rates well below the averages reached before the global financial crisis of a decade ago.’