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- The director of the International Monetary Fund has alerted about crypto token failure and selling pressure
- We see more selloffs in crypto assets- Tobias Adrian
On Wednesday, The director of Monetary and Capital Markets in the International Monetary Fund (IMF), Tobias Adrian gave an interview to Yahoo finance in which he alerted about crypto token failures and selling pressure in the market.
The director said,
“We may see more selloffs in crypto assets and in risky asset markets like real values. There may be more such failures of some of the coin offerings- particularly, the algorithmic stablecoins are damaged worse, other than that there are many more which may fail. In between this downturn, the crypto may also fall unexpectedly.”
Cryptocurrency terra (LUNA) and stablecoin terrausd (UST) collapsed this year in May which pushed Gary Gensler the chairman of SEC to alert the audience about the failure of crypto tokens.
The director of IMF also warned about the same which Treasury Secretary Janet Yellen and the Federal Reserve have alerted earlier for fiat-backed stablecoins to face runs.
The director kept his views on a tether (USDT) and explained that “ Talking about tether there is a probability of susceptibility as it is not supported one to one.” He also focused that some stablecoins are backed by assets that are associated with high risks and it is definitely a susceptibility that few stablecoins are not entirely backed by assets such as cash.
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Crypto Assets have faced a drastic sell-off
However, the director does not see any instant risk on parity with the 2008 economic collapse and said that:
The alarming thing in the 2008 financial crisis was something that the banks were extremely revealed to the shadow banks, and we don’t see this disclosure of banks to shadow banks through crypto currently.
Furthermore, Adrian highlighted that some rules should be made to protect investors and the financial system focusing on the entire cryptocurrencies presently.
Managing the coins themselves is going to be very laborious, but managing the entry points like exchanges and wallet providers to finance those coins, is something that is very detailed and also very practical.
On Tuesday, the IMF issued a report in which the authority mentioned that “Crypto assets have faced a drastic sell-off that has created a massive loss in crypto investment vehicles and brought breakdown of algorithmic stablecoins and crypto hedge funds, but the overflow of the wider financial system have been restricted so far.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
