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IMF Warns More Cryptocurrencies May Fail

Wed, 07/27/2022 - 15:37
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Alex Dovbnya
Are there more dominoes to fall? IMF believes that cryptocurrency crisis could worsen
IMF Warns More Cryptocurrencies May Fail
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Tobias Adrian, director of monetary and capital markets for the International Monetary Fund (IMF), has warned in a recent interview with Yahoo! Finance that the cryptocurrency industry could potentially get worse.

Adrian believes that more cryptocurrency projects could fail in the future. It is worth noting that the current cryptocurrency crisis was largely triggered by the downfall of the TerraUSD (UST) algorithmic stablecoin that took the whole ecosystem down.

More vulnerable fiat-backed stablecoins are likely to see bank runs in the near future. He specifically mentioned Tether, the leading stablecoin issuer, as an example of such projects. That said, Adrian acknowledged that there were certain stablecoins that were less vulnerable to such crises.

Expecting a steeper sell-off

The IMF director is convinced that digital assets will see an even steeper sell-off if the U.S. economy enters a recession.

The central bank is widely expected to announce another massive rate hike later today in order to tame inflation.

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Massachusetts Senator Elizbeth Warren recently criticized the U.S. Federal Reserve's aggressive monetary policy that could trigger a "devastating" recession. The Fed, however, is in the process of attempting to pull a "soft landing."

Focusing on "feasible" regulatory tasks

Speaking of regulation, Adrian believes that the focus is on bringing wallet providers and cryptocurrency exchanges into compliance since they serve as entry points for thousands of cryptocurrencies. At the same time, he admitted that regulating each individual token would be a herculean task given that there are tens of thousands of tokens in existence.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at