WASHINGTON—The International Monetary Fund (IMF) is warning of risks posed by cryptocurrencies, especially in emerging and developing countries, and is calling for coordinated action to be put in place global standards.
"Determining valuation is not the only challenge in the crypto ecosystem: Identification, monitoring, and management of risks defy regulators and firms. These include, for example, operational and financial integrity risks from crypto asset exchanges and wallets, investor protection, and inadequate reserves and inaccurate disclosure for some stable coins,” the IMF stated. “Moreover, in emerging markets and developing economies, the advent of crypto can accelerate what we have called 'cryptoization' -- when these assets replace domestic currency, and circumvent exchange restrictions and capital account management measures.
The IMF added that capital flow management may need to be fine-tuned due to digital currencies.