The International Monetary Fund (IMF) has warned governments and investors about several risks for the global financial system with crypto assets named as one of those factors, the body said on Tuesday in its new World Economic Outlook.
The IMF included quick crypto market developments in the category of financial tension challenges, which it described as factors that could trigger a sudden change in international economic conditions. For instance, firmer-than-expected inflation in the United States and economic turmoil in Turkey also came under this category of the Outlook.
“Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system,” IMF wrote in the Outlook.
In a previous IMF report, the organization said that crypto assets did not pose a risk to the international financial system.
The IMF published its World Economic Outlook ahead of releasing its latest Global Financial Stability Report this week. In a pre-released chapter 2, which analyses regulatory reform ten years after the Global Financial Crisis, IMF called for state oversight in the fintech industry when needed.
“Despite [fintech] potential benefits, our knowledge of its potential risks and how they might play out is still developing,” the body explained in Chapter 2 of Global Financial Stability Report.
“Increased cybersecurity risks pose challenges for financial institutions, financial infrastructure, and supervisors. These developments should act as a reminder that the financial system is permanently evolving, and regulators and supervisors must remain vigilant to this evolution and ready to act if needed.”
The IMF reports come at a time of active global discussion about how states and international bodies should oversee virtual coins. Financial Action Task Force (FATF) should release its global anti-money laundering (AML) rules this month, which will also apply to digital assets. In the US, lawmakers, regulators, and the financial industry have organized several events dedicated to cryptocurrency regulation.