Former World Bank CEO and current IMF Managing Director Kristalina Georgieva does not believe cryptocurrencies are a concern for global financial stability.
In a report on global economic prospects published this week by the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, the international organization has noted that the current state of the crypto market is not a concern for global financial stability.
According to Georgieva's report, which was seen by CoinDesk, the collapse of some cryptocurrency platforms, such as Celsius Network, has not had a significant negative impact on financial markets.
“The spillover effects to the broader financial system have so far been limited”, Georgieva noted, referring to the collapse of cryptocurrency platforms and the crypto winter that the industry is currently experiencing.
IMF Managing Director's outlook is a relief for the crypto community.
In recent years, the international organization has been quite skeptical of crypto assets and has repeatedly issued various warnings about the market, pointing out the risk of using digital assets.
One of the biggest concerns the IMF had pointed out until then was that cryptocurrencies would affect monetary and financial stability.
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The IMF's outlook on the global economy and cryptocurrencies
For the IMF, the ongoing lockdowns caused by the Covid pandemic and the impact of Russia's war on Ukraine pose greater threats to global financial stability than the current crash in the cryptocurrency market.
The organization forecasts a slowdown in global economic growth from 6,1% last year to 3,2% this year and 2,9% next year. According to the IMF, the economic slowdown in the world's three largest economies, the United States, China and the Eurozone, has been worse than expected.
However, while the Fund has been more attentive to the crypto market since the Terra ecosystem debacle, exerting greater regulatory pressure on the stablecoins and cryptocurrencies in general, recognizes that there are currently no significant threats in the cryptoasset market to the stability of the financial system.
This represents a change in the international organization's vision and perspectives towards cryptocurrencies, although it remains skeptical.
At the same time, Georgieva's report contradicts one published by the IMF earlier this year and one published by European regulators last month, which warned of the risks posed by the continued and accelerated growth of cryptocurrencies for the global economy.
The IMF report, titled "Cryptic Connections: Spillovers between Crypto and Equity Markets", dated January 11, noted that the accelerated growth of cryptocurrencies had raised global concerns about possible implications for financial stability.
The IMF is part of the Cambridge CDAP programme
In late April, Georgieva had also noted that the use of cryptocurrencies and digital assets in evading economic sanctions by companies and governments, which was another major concern for global regulators, was impractical.
Earlier this month, the IMF published a report indicating that digital assets can serve as effective alternatives to the traditional financial system.
The International Monetary Fund joined other organizations and institutions in March of this year to CDAP program from the University of Cambridge to delve deeper into the benefits and risks of digital assets.
Continue reading: The International Monetary Fund (IMF) believes that cryptocurrencies are the evolution of money
