The International Monetary Fund has said that the global boom of cryptocurrencies poses new problems for financial stability.
The IMF said this in a blogpost, adding that the crypto ecosystem allows for quick and easy payments, innovative financial services, and inclusive access to the unbanked.
The IMF said that the total market value of all the crypto assets had grown by 10-folds ($2tn) since 2020, with the ecosystem flourishing, replete with exchanges, wallets, miners, and stablecoin issuers.
But the body said that many of these entities lacked strong operational, governance, and risk practices.
The monetary body said, “Crypto exchanges, for instance, have faced significant disruptions during periods of market turbulence.
“There are also several high-profile cases of hacking-related thefts of customer funds.
So far, these incidents have not had a significant impact on financial stability.
“However, as crypto assets become more mainstream, their importance in terms of potential implications for the wider economy is set to increase.
“Consumer protection risks remain substantial given limited or inadequate disclosure and oversight. For example, more than 16,000 tokens have been listed in various exchanges and around 9,000 exist today, while the rest have disappeared in some form.