In an interesting turn of events, the IMF released a report stating “crypto assets do not appear to pose macrocritical financial stability risks.”

The report focused on the potential for crypto to increase the efficiency of existing monetary systems, while also providing customers with additional means to diversify their portfolio. They were hesitant to completely endorse the virtual currency, as it exists in a new and unproven market space. Though, with market maturity, we can expect that the uncertainty surrounding Blockchain’s longevity will subside.

The IMF’s optimistic position is surprising, considering their close ties to central banking institutions. It is clear that the perceived competition has created bad blood between banks and the emerging crypto marketplace. Though It is possible that, if the IMF were to suggest to policymakers that the benefits of adopting crypto exceeded the cons, leniency from banking institutions would follow. Odds are that the close relationship between banks and the IMF may kickstart widespread crypto adoption after their recent findings.

Many institutions cite the criminal risks and volatility of the crypto markets to be key reason why there is so much resistance. Though, comments from the IMF’s report dismiss the first myth about the unstable crypto market:

“After accounting for price volatility, risk-adjusted returns have not dramatically exceeded those of mainstream assets over the medium term, though they have in the most recent year. For example the Sharpe ratio of crypto assets was relatively close to the risk-reward ratio of the S&P 500 over the past three years, and it was below what investing in so-called FANG stocks (Facebook, Amazon, Netflix, Google) would yield.”

Despite the negative connotations associated with digital currency, the financial risks are nowhere near as high as many believe.

Additionally, it was reported by the Hong Kong Financial Services and Treasury Bureau that criminal activity involving cryptocurrency only poses a medium-low risk.

“While we have not found substantial risks in these newly developing payment methods or commodities, this is a rapidly developing area requiring continued monitoring.”

Traditional financial crimes (credit card fraud, money laundering etc.) far outpaced illicit crypto activity. In America alone, credit card fraud topped 24.7 billion dollars in 2016, whereas the global sum of crypto based scams is expected to only reach 3.3 billion by years end.

Attempting to associate crypto to criminal activity is a straw man argument, as the numbers speak for themselves.

As international committees research the actual impact cryptocurrencies will have on the future of financial and social systems, clear guidelines can be implemented to protect everyone involved. However, banks and the emerging crypto market must actively work towards rectifying their current relationship, as hostilities are based on speculation and fear.