Russia: Nothing is going well for the ruble-cryptocurrency pair, says the IMF

The IMF believes that the lack of liquidity would handicap transfers and exchanges of Russian ruble against cryptocurrency. However, everyone thought that the crypto alternative would play well in favor of the Russians knocked out by the economic sanctions.

The ruble-cryptocurrency pair, an issue that has its limits

The International Monetary Fund notes that the ruble-cryptocurrency pair suffers from a handicap linked to the lack of liquidity. Indeed, in recent weeks, the exchanges linking these two assets have considerably decreased. What ” makes large-scale transfers of value through exchanges impractical “.

It is clear that the cryptocurrency alternative has always served the Russians against the backdrop of economic sanctions. And the IMF admits that this will always be the case in the absence of sufficient due diligence and limiting the use of anonymization tools.

Recently, this financial institution published a report describing the threats to global financial stability. Indeed, sanctioned countries would be able to step up their efforts to mine digital assets like bitcoin (BTC). In this way, they will have the facility of monetize energy resources ” in another way.

The pandemic has been good for cryptocurrency exchanges

The said report also highlights an uptick in crypto trading volume against a number of emerging market currencies. This has been particularly evident since the start of the Covid-19 pandemic. The IMF to conclude that the gradual adoption of cryptocurrencies as a means of payment “ could push significant problems to decision makers “.

Turkey is among the countries with very high demand. The reason is that the price of the Turkish lira has been halved in the last 12 months. This would come from inflation beating all its records for 20 years. As a result, consumers are flocking to bitcoin to preserve the value of their savings.

As a wake-up call, the IMF would like to convene world leaders to a meeting aimed at drawing up ” a comprehensive, consistent and coordinated regulatory approach to cryptocurrencies “. History to stop the current bleeding.

Already, he recognizes that the fight will be tough, given the divergence of positions of certain countries with regard to bitcoin and Tether. To cite only the United Kingdom, which recently presented its ambition to become a ” world center of cryptocurrency.

Besides, there are countries like China which are not very crypto-friendly. Indeed, she decided to swap the crypto assets for digital yuan. And this must have cost the stability of several economic players betting on cryptocurrencies.

The IMF criticized decentralized finance (DeFi)

A good part of the IMF report deals with the DeFi sector, marked by a “ extraordinary growth at races over the past two years “. This phenomenon could be explained in particular by its efficiency and its better performance compared to TradFi.

What worries the International Monetary Fund about this is the development of the interconnection between DeFi and traditional markets. Sooner or later it will lead to market, liquidity and cybercrime risks amid legal uncertainties “.

Here is an excerpt from those writings!

The lack of a centralized entity governing DeFi is a challenge for effective regulation and supervision. Regulation should focus on elements of the crypto ecosystem that drive DeFi, such as stablecoin issuers and centralized exchanges. Authorities should also encourage DeFi platforms to be subject to robust governance systems, including industry codes and self-regulatory bodies. These entities could be an effective channel for regulatory oversight. »

In other words, DeFi represents a real danger in the eyes of the IMF. Especially in view of the prospect of liquidations linked to the collapse of the markets, the ” stressful times which generally lead to a lack of liquidity.

IMF alarmed by relentless cyber attacks

The financial institution also pointed to the risk of security exploitation given the resurgence of protocol hacking. But regulation can be easier said than done.

Hence this warning:

DeFi’s high market, liquidity, and cyber risks may necessitate adjusting the regulatory scope, but DeFi’s anonymity, lack of a centralized governance body, and legal uncertainties make the traditional approach to ineffective regulation. »

Reason why this brace between TradFi and DeFi must end since it threatens to “ slow the pace of growth while addressing the risks of interconnection. »

By deciding on cryptocurrencies, the IMF risks the wrath of the believers. For many of them accuse him of promoting the status quo, as well as the domination of fiat. Besides, didn’t he enjoin El Salvador to abandon bitcoin lately?

Source: CoinMarketCap

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Mikaia Andriamahazoarimanana

The blockchain and crypto revolution is underway! And the day when the impacts will be felt on the most vulnerable economy of this World, against all hope, I will say that I had something to do with it.

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Russia: Nothing is going well for the ruble-cryptocurrency pair, says the IMF


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