IMF Forecasts Crypto Adoption to Increase Due to Russia-Ukraine War
Increased usage of digital currencies, according to a managing director at the International Monetary Fund (IMF), might be a notable outcome of the Russia-Ukraine conflict. According to a recent Financial Times (FT) story, IMF first deputy managing director Gita Gopinath believes that large scale international sanctions on Russia may split the current global economic system.
Cryptocurrency assets, central bank digital currencies (CBDCs), and stablecoins, according to Gopinath, may experience higher usage as a result. Legislation would be required as a result.
“Following the current events, all of them will get considerably more focus, which brings us to the issue of international norms. There is a void that has to be addressed.”
According to Gopinath, the US dollar’s supremacy is expected to wane as a consequence of the sanctions imposed by the US in reaction to Russia’s attack on Ukraine on February 24th. Last December, the IMF cautioned that if the almost $2.5 trillion crypto market gets increasingly intertwined with the regular banking system, systemic financial stability concerns might develop in some countries.
This January, the institution discussed how the increasing influence of cryptocurrencies, along with their price fluctuations, may have a detrimental impact on established markets. The IMF’s managing director, Kristalina Georgieva, recently stated that the institution prefers CBDCs over digital currencies.
“CBDCs have the ability to provide better resilience, security, availability, and cheaper fees than Bitcoin and other altcoins, if they are structured well. When juxtaposed to unbacked crypto assets, which are intrinsically volatile, this is undeniably true.”