IMF Warns G20 Countries: Widespread Use of Cryptocurrencies May Cause Banks to Lose Deposits and Reduce Lending

According to PANews March 13 news, according to CoinDesk, the International Monetary Fund (IMF) has warned G20 countries that the widespread use of crypto assets may cause banks to lose deposits and reduce loans. The IMF’s report on the “Macrofinancial Implications of Cryptoassets,” presented to the G20 at a meeting in India in February, was released on Monday, days after crypto-friendly banks Signature Bank, Silicon Valley Bank (SVB) and Silvergate Bank have collapsed.

“The widespread use of crypto assets poses significant risks to the effectiveness of monetary policy, exchange rate management, capital flow management measures, and fiscal sustainability,” the report said. “In addition, central bank reserves and global financial safety nets may require changes, bringing Potential instability. Ultimately, banks could lose deposits and have to reduce lending.” The report also states that “there are many risks associated with cryptoassets, although the importance and relevance of specific risks vary by country.” However, The report also noted that despite “significant risks, cryptoassets have developed technologies that the public sector can leverage to achieve their own policy goals.”

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