IMF Vice President: Accelerate Regulatory Actions to Avoid Systemic Risks of Cryptocurrencies to Traditional Finance

ChainCatcher news, International Monetary Fund (IMF) Vice President Bo Li calls for more action on regulation in the crypto industry to avoid the destabilizing effects of cryptocurrencies on banks and traditional financial institutions. Nobuyasu Sugimoto, Deputy Director of the IMF's Financial Regulation Division, and IMF Vice President Bo Li believe that, given the increasing ties between traditional finance and cryptocurrencies, the volatility of cryptocurrencies could pose systemic risks to the existing financial system.

The IMF blog post points out that developed economies are also vulnerable to the financial stability risks posed by cryptocurrencies, as institutional investors were attracted by higher returns in the previous low-interest-rate environment, increasing their holdings of stablecoins. (source link)