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THE BITCOIN (BTC) and Blockchain boom facilitating the “rapid growth” of cryptocurrency assets could create “new vulnerabilities in the international financial system,” the International Monetary Fund (IMF) has cautioned.
The recent explosion of interest in crypto assets and the relentless surge in BTC’s value may contribute to a weakened global financial system overall, the IMF has suggested.
The Fund published a key report today, October 10, entitled the World Economic Outlook.
It said: “Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services.
“Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
It is not the first time the IMF has warned about risks posed by BTC and cryptocurrencies.
The IMF's stability report last week said: “Despite its potential benefits, our knowledge of its potential risks and how they might play out is still developing.
“Increased cybersecurity risks pose challenges for financial institutions, financial infrastructure, and supervisors.
“These developments should act as a reminder that the financial system is permanently evolving, and regulators and supervisors must remain vigilant to this evolution and ready to act if needed.”
Traditional financial institutions, from the US’s Security and Exchange Commission to the UK's Treasury Committee, are currently assessing whether bitcoin and other cryptocurrencies - including Ripple Lab’s XRP token, Ethereum, Litecoin, EOS and Stellar - could be integrated into existing systems.
The financial bodies are attempting to gauge how the digital assets could be used as investment tools and means to move money across borders more efficiently.
Regulators around the world are - with varying degrees of success - attempting to get to grips with the Bitcoin and Blockchain phenomenon.
Last month Treasury Committee Chair Nicky Morgan labelled the burgeoning world of cryptocurrency investment as a “wild west” industry.
By SAM STEVENSON
PUBLISHED: 06:21, Wed, Oct 10, 2018 | UPDATED: 06:23, Wed, Oct 10, 2018
