G20 nations were warned by IMF about incoming trouble for crypto-friendly banks

ambcrypto.com:

The past week has been devastating for banks affiliated with businesses operating in the crypto space. Silvergate Bank, Silicon Valley Bank, and Signature Bank saw their operations suspended within a week’s span, thanks to liquidity issues.

However, the turmoil in the crypto-banking space was apparently foreseen by the International Monetary Fund (IMF). 

The International Monetary Fund sent a report titled “Macrofinancial Implications of Crypto Assets” to G20 nations during their meeting in India last month.

The report, which was with help from India’s Ministry of Finance and international focus groups, was made public earlier on 13 March.

It highlighted the heightened attention that crypto assets were receiving from policymakers.

According to the report, “unbacked” cryptocurrencies such as Bitcoin, and stablecoins may have widespread implications for microfinance stability if widely adopted.

The IMF argued in the report that the benefits of crypto assets that are currently being marketed, including cheaper and faster cross-border payments, more integrated financial markets, and increased financial inclusion, are yet to be realized. 

The report emphasized that in the meantime, the widespread adoption of crypto assets could threaten the effectiveness of monetary policies.

It also noted that the crypto asset market had grown in complexity and exhibited significant volatility. “A widespread proliferation of crypto assets comes with substantial risks to the effectiveness of the monetary policy, exchange rate management, and capital flow management measures, as well as to fiscal sustainability,” the IMF’s report read. 

According to the IMF, these factors may require changes in central bank reserve holdings, and the