International Monetary Fund (IMF) involved About the encoder space after The collapse of Luna and Terra USD.
The International Monetary Fund is concerned about the continued use of cryptocurrencies
The latter was an algorithmic stablecoin that lost its peg a few months ago. Not only did this lead to the complete collapse of the coin and its sister asset, Luna, but investors ultimately lost billions of dollars overnight. The International Monetary Fund said in a recent interview that this likely won’t be the only time something like this has happened, and warned listeners that there may be other coins to fail in the future.
The crypto space has been experiencing one of the most bearish markets in history. The price of Bitcoin, for example, is down nearly 70% from last November when it hit a new all-time high of around $68,000 per unit. The asset is now struggling to maintain a position in the lower $20,000 range, and many analysts are divided over whether the coin has bottomed.
In addition, the crypto space has lost more than $2 trillion in valuation. The International Monetary Fund noted all the frightening rumblings taking place inside space and issued the following statement:
We could see more selling, both in crypto assets and risky asset markets like stocks. There may be more failures in some coin offerings, especially some algorithm stable coins that have been hit hard, and there are others that can fail.
To be fair, the IMF has never rocked the cryptocurrency since the space is often marred by volatility and price swings. Not long ago, the organization reached out to the Central American country of El Salvador and begged it to rescind all the love and respect it had for bitcoin, claiming that the asset was not stable enough to be taken seriously as legal tender. El Salvador quickly dropped this demand and continued to use BTC as legitimate money despite the constant price fluctuations.
Will other currencies collapse?
The agency continued its statement with the following at length regarding Tethers, which it now feels are as vulnerable as Terra USD in many ways:
There are some vulnerabilities out there because they are not supported one-to-one… [Some fiat-backed stable coins] Backed by rather risky assets… It’s definitely a weak point that some stablecoins are not fully backed by cash-like assets… What was very worrying about the 2008 crisis was that banks were very vulnerable to shadow banks, and we don’t see This exposure of banks to shadow banks through crypto.
The recent bear market eventually increased the call for crypto regulation which is something like a two-sided coin (pardon the word game) in that while it could make the space more legitimate, cryptocurrency is built on notions of financial independence.
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