IMF: Bitcoin slump did not affect global financial stability

Massive sell-offs in the cryptocurrency market have had limited consequences for the broad financial system. The IMF researchers came to this conclusion in the Global Financial Stability Report.

After a tentative recovery in 2021, the economic outlook has turned gloomy and uncertain, with the probability of a global recession. The latest #WEO explains the reason behind the downgrade to our growth projections. https://t.co/ldMsaieJUU pic.twitter.com/PbpvScahsN

— IMF (@IMFNews) July 26, 2022

The second quarter of 2022 proved the worst for Bitcoin in 11 years. From its ATH the price of digital gold fell by nearly 70%, with a similar dynamic seen in other cryptocurrencies.

“Digital assets endured a sharp sell-off. This was reflected in the failure of algorithmic stablecoins and large losses for industry participants, but the impact on the financial system as a whole was limited, — IMF says.

Previously, stablecoins were identified as risk zones by the Fed and ECB in financial stability reports.

The BIS will create a platform to assess the consequences of stablecoin and DeFi project collapses.

In July, Singapore announced tighter regulation of cryptocurrencies. Similar proposals emerged in the United States and the United Kingdom.

In Europe, provisions of the MiCA regulation were preliminarily agreed, “which will prevent episodes like the Terra collapse”.

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