IMF Warns of Further Crypto Selloffs and More Coins Failing

A director with the International Monetary Fund (IMF) has warned of further selloffs in both crypto assets and equities. He further warned that more crypto tokens could fail.

IMF Foresees More Crypto Selling Pressure

Tobias Adrian, director of Monetary and Capital Markets for the International Monetary Fund (IMF), warned about further selling pressure in the crypto market and more crypto token failures in an interview with Yahoo Finance Wednesday.

He said:

We could see further selloffs, both in crypto assets and in risky asset markets, like equities.

“There could be further failures of some of the coin offerings — in particular, some of the algorithmic stablecoins that have been hit most hard, and there are others that could fail,” he detailed. The IMF director also expects crypto to drop even further amid a recession.

In May, cryptocurrency terra (LUNA) and stablecoin terrausd (UST) imploded, prompting SEC Chairman Gary Gensler to warn that a lot of crypto tokens will fail.

Adrian also warned about the potential for fiat-backed stablecoins to experience runs, something that both Treasury Secretary Janet Yellen and the Federal Reserve have also cautioned about.

Speaking of tether (USDT) in particular, the IMF executive stressed, “There’s some vulnerability there because they’re not backed one to one.” He noted that some stablecoins “are backed by somewhat risky assets,” emphasizing, “it is certainly a vulnerability that some of the stablecoins are not fully backed by cash-like assets.”

Nonetheless, Adrian does not see an immediate threat on par with the 2008 financial crisis, stating:

What was very worrisome in the 2008 crisis was that the banks were highly exposed to the shadow banks, and we don’t see this exposure of banks to shadow banks through crypto at the moment.

Moreover, the IMF director noted that regulations are needed to protect investors and the financial system. Noting the sheer number of cryptocurrencies in existence, Adrian opined:

Regulating the coins themselves is going to be difficult, but regulating the entry points such as exchanges and wallet providers to invest in those coins, that’s something that is very concrete and very feasible.

The IMF also published a report Tuesday stating: “Crypto assets have experienced a dramatic sell-off that has led to large losses in crypto investment vehicles and caused the failure of algorithmic stablecoins and crypto hedge funds, but spillovers to the broader financial system have been limited so far.”

What do you think about the comments by the IMF director? Let us know in the comments section below.

Related Posts

Time to Buy Dogecoin? DOGE Price up 8% as Alternatives like Tamadoge also Rocket

Dogecoin closed out the week strong with an 8% pump on Sunday August 14th, up around 14% in total on its weekly candle. Heading into the latter…

Bitcoin Miners Continue Distribution, Bad Sign For The Rally?

On-chain shows Bitcoin miners have been in a phase of distribution recently, a sign that could prove to be bearish for the price of the crypto. Bitcoin…

Weekly NFT Sales Show Improvement, Fantom and Immutable X NFT Volume Spikes

Non-fungible token (NFT) sales managed to climb higher during the last seven days than the previous week’s overall sales. This week’s NFT sales managed to jump over…

How Metaverse Real Estate is sinking!

The previous year, a huge flood of cash from tech fans and corporate marketers provoked real estate rates in the metaverse. Alt-coin holders and CryptoPunk NFT collectors…

Why Anonymous Twitter user is transmitting crypto to idols

Let’s see what senior crypto reporter Anita Ramaswamy thinks: Tornado Cash has been the conversation of the city this week in crypto cycles. The U.S. administration’s Office of…

NFT Naruto Museum signs agreement with Michael Jackson Estate

More than a decade after his death, Michael Jackson’s fame lives on with posthumous albums, Broadway shows, and continued cultural relevance. After dominating the fabric world, it…

Generated by Feedzy