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Crypto Design Clashes With Traditional Banking – IMF Director

The rise of cryptocurrency has been one of the most remarkable phenomena of the 21st century. It has certainly been a disruptive force in the financial sector.  

Traditional banks have had to adjust to a new world of decentralized and digital currencies. The International Monetary Fund (IMF) has been closely monitoring developments.

In a recent interview, the IMF’s director of Monetary and Capital Markets, Adrian Blundell-Wignall, said there is a fundamental conflict between traditional banking and crypto design. He remarked that institutions must ensure that what is happening is legitimate.

Adrian’s comments are indicative of the IMF’s stance on cryptocurrency. The organization has maintained that crypto is still in the early stages of development, and it is crucial to have a regulatory framework in place to protect market participants.

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IMF Chief Uncertain About Crypto Rebound After Winter

The IMF Director stated that many arrangements made in the cryptocurrency have become invalid. Adrian suggested that valuations similar to those seen in the past may eventually return, but there is no guarantee.

Michael Novogratz, an avid cryptocurrency promoter, projected that Bitcoin might change hands at $30,000 again by the end of the month. Furthermore, the official provided commentary on the Federal Reserve’s denial of Custodia’s application for a crypto bank, stating that the decision would reduce the potential risks that banks could face.

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Since the risks are hard to manage, the official stated that this measure was necessary. Adrian commented that the FSB (Financial Stability Board) at its base in Basel is spearheading an international effort to achieve comprehensive global and uniform crypto regulation.

Experts Call For Sectoral Policy To Drive U.S. Development 

The IMF has cautioned against the potential risks that come with digital currencies, such as money laundering and terrorist financing. They also point out that the anonymous nature of cryptocurrency transactions makes it difficult to track and trace bad actors.

Last week, the International Monetary Fund (IMF) harshly criticized El Salvador for its decision to accept Bitcoin as legal tender. At the same time, the U.S. needs to speed up the implementation of its cryptocurrency legislation.

Adrian said the crypto industry needs proper investor and consumer safeguards. “There is a minimal assurance on how the crypto sector handles customer funds,” he said.

Additionally, attempts to create comprehensive crypto regulations and laws for stablecoins have faced delays in Congress since 2022. The traditional banking sector and the crypto sector are in a state of flux.

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While some may see this as a natural clash between two different types of technologies, it is essential to remember that both have a role to play in the global economy. The IMF is undoubtedly taking the proper steps to ensure that crypto is regulated to benefit consumers and investors.


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Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

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