Bitcoin and other cryptocurrencies are fast becoming global trends. Therefore the International Monetary Fund has stressed the need to hold global discussions on ways to ensure a peaceful co-existence between cryptocurrencies and traditional fiat money, and also to mitigate some of the risks inherent in the use of virtual currencies.
The International Monetary Fund (IMF), a 189 member organization, focused on global monetary cooperation, secure financial stability amongst other functions, has declared it is now quite imperative for the world to come together and have real discussions about cryptocurrencies. The IMF has warned of the risks cryptocurrencies pose to investors due to its volatility and liquidity. On January 18, the IMF spokesman, Gerry Rice said, “Greater international discussion and cooperation among regulators, yes, would be helpful.”
Although the official did not state exactly what kind of cooperation is needed, it is most likely that the body is looking to organize the mostly unregulated cryptocurrencies ecosystem as the phenomenal rise in the price of bitcoin in 2017 lured mainstream investors to bet on cryptocurrencies.
Rice noted that:
“When asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy. It is important for people to be aware of the risk-management measures.”
With Rice’s statement, the IMF has now joined a growing list of authorities calling a standard regulation of the blockchain-based virtual currencies world, in a bid to tame the highly unpredictable digital currencies ecosystem, protecting investors and reducing the rate of cryptocurrency use by criminals to the barest minimum.
On January 16, BTCManager reported that US Treasury Secretary, Steve Mnuchin has called for an urgent G20 summit concerning cryptocurrencies. He declared that the United States is making serious plans to ensure “bad people cannot use these currencies to do bad things.”
In September 2017, the IMF Managing Director, Christine Lagarde, stated that it is essential to keep a close watch on cryptocurrencies due to their growing popularity. In her words:
“Not so long ago, some experts argued that personal computers would never be adopted and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.”
Of a truth, cryptocurrencies come with immense benefits like quick and easy payment transactions; there are also some other risks apart from the possible loss of funds by investors through wild price swings. Rice reiterated that “Cryptocurrencies can pose considerable risks as potential vehicles for money laundering, terrorist financing, tax evasion and fraud.”
It is worth noting that back In December 2017; the United States Police arrested a US-based Zoobia Shahnaz in connection with allegedly using cryptocurrencies to fund terrorist organizations. There have also been various cases of criminals using digital currencies to perpetuate crime, making it entirely necessary to establish guidelines that would govern the crypto space, in a manner that would not cripple the growth of the bitcoin and altcoin markets.