The International Monetary Fund has relased a paper, called The April 2018 Global Financial Stability Report (GFSR) in which it concludes that “at present, crypto assets do not appear to pose macrocritical financial stability risks.”

Even made it further, by explaining:

“It is impossible to know the extent to which crypto assets may transform the financial infrastructure and whether most new crypto assets are likely to disappear as in past episodes of technological innovation (as many tech companies did during the boom of the late 1990s, for example). Before they can transform financial activity in a meaningful and lasting manner, crypto assets will first need to earn the confidence and support of consumers and financial authorities.”

However, in order to establish confidence, there must be a consensus in terms of global regulations on how to categorize cryptocurrencies; securities or currencies. Additionally since we are still in the early days for cryptocurrencies, the IMF asked regulators to be vigilant and cautious about the potential financial stability by stating that some of the crypto aspects deserved to be monitored such as leveraged trading of cryptos even though the paper suggests that “the risk of spillovers from idiosyncratic price moves in crypto assets to the wider market may be limited at this point.”

Another assessment made by the IMF is the possible integration of crypto assets into mainstream financial products. The paper speculates that a possible rising number of crypto asset investors would mean a performance correlation between traditional and crypto assets. With such volatility that the regulators see in these markets all the time, this is kind of worrying for them.

The final aspect mentioned by the IMF was the cross border nature of digital currencies, meaning that disruptions may occur in national level. This can be made more problematic by different regulatory approaches being introduced, hence the importance of a global consensus.

So far so good, at least that is what we believe if we look at the last G20 meeting. There Mark Carney, the head of the Bank of England has expressed that crypto assets ‘do not pose risks’ to the world’s economy. Now with a such realistic report made by the IMF we believe that there are great times ahead of us, let’s just hope that the regulatory bodies will keep their sanity in the future as well.