Russia-Ukraine War Will Boost Crypto Assets Adoption According to IMF
A director of the International Monetary Fund (IMF) reportedly thinks the increased use of cryptocurrencies may be a result of the war between Russia and Ukraine.
In a new report from the Financial Times (FT), the IMF’s first deputy director, Gita Gopinath, says the extensive international sanctions imposed on Russia could fragment the existing world economic order.
Gopinath believes crypto assets, central bank digital currencies (CBDCs) and stablecoins could see greater adoption in response. The need for regulation would then follow.
gopinath says,
“All of these will receive even more attention after the recent episodes, which draw us to the issue of international regulation.
There is a gap that needs to be filled.”
Gopinath also tells FT that the US dollar’s dominance is likely to decline as a result of the sanctions imposed by the United States in response to Russia’s February 24 invasion of Ukraine.
In December, as part of a push for international regulation, the IMF warned that as the nearly $2.5 trillion crypto market becomes more intertwined with the traditional financial system, systemic financial stability risks could arise in certain countries.
The institution continued in January by discussing how the rising popularity of cryptocurrencies coupled with their price volatility could negatively impact traditional markets.
More recently, the director of the IMF, Kristalina Georgieva, said the organization prefers CBDCs over cryptocurrencies.
“If carefully designed, CBDCs could potentially offer greater resilience, greater security, greater availability and lower costs than private forms of digital money.
That is clearly the case when compared to unbacked crypto-assets which are inherently volatile.”
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