Crypto currencies have been around since 2008, with the quiet creation of Bitcoin by Satoshi Nakamoto. It was a relatively unknown asset until recently and in 2017, it really reached the mainstream and exploded in growth, with the crypto industry expanding to over $800 billion before crashing to sit around $200 billion at the time of writing. While many people have benefitted from the growth of the crypto markets, it obviously creates concerns for many others, causing governments and NGO’s to have to react crypto as something new and different.
One in particular, the IMF (International Monetary Fund) is skeptical for crypto’s to be immediately integrated into the international financial system, as they believe they can create new vulnerabilities. Markets and banks are still adjusting to the new crypto industry and the IMF wants institutions and states to wait on full adoption of these assets as they come to fully understand their effects.
According to the IMF, they are worried about adopting blockchain technology as cross border payment services due to the possibility of cybersecurity breaches and cyber attacks. It adds another layer for the IMF to deal with, as well as represents an additional risk to the international financial infrastructure.
However, it is inevitable that international regulatory action will be taken on crypto currencies, due to its innate ability to transcend borders. Governments across the world are already rolling out different regulations on cryptos, on the heels of many big banks attempting to create bitcoin products to help mainstream investors get involved in the crypto markets. The IMF is against the rapid crypto growth due to the vulnerabilities it brings, just as any rapidly developing market does. More time will give the IMF a chance to find a way to make sure the vulnerabilities are minimized, before crypto is fully adopted by the globe.
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