The latest crypto developments have prompted global monetary authorities to revisit crypto rules and warn banking institutions about the risks associated with digital property, such as liquidity crunch and extremely high volatility. The failures of Terra Luna UST and FTX, which together involved over $100 billion, were the significant events that prompted crypto warnings.
According to a recent JPMorgan report, additional crypto rules are on the way, focusing on the staking and stablecoins industries. As a result, crypto staking giant Lido Finance recently stated that the SEC’s crackdown on staking packages might eventually lock out US digital asset buyers.
According to a statement issued by the International Monetary Fund’s (IMF) Governing Board on Thursday, the digital property should not be granted official currency or authorized tender standing to protect financial sovereignty and stability. The International Monetary Fund (IMF) acknowledged that the cryptocurrency market has enormous potential to disrupt international financial stability.
Furthermore, the IMF addressed member countries’ concerns about the benefits and risks of crypto property and developed appropriate policy responses. Notably, the IMF operationalizes the guidelines outlined in the Bali Fintech Agenda (IMF and World Financial institution 2018) and includes macro-financial issues such as implications for financial and monetary policies.
“Efforts to place in place efficient insurance policies for crypto property have develop into a key coverage precedence for authorities, amid the failure of assorted exchanges and different actors throughout the crypto ecosystem, in addition to the collapse of sure crypto property. Doing nothing is unsustainable because cryptocurrency assets may be continue to evolve despite the current downturn,” the IMF stated.
Notably, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance coverage Company, & Office of the Comptroller of the Currency issued a joint statement cautioning financial institutions to approach the cryptocurrency market cautiously.