IMF Says The Situation In The Cryptocurrency Industry Will Be Even Worse

The IMF said crypto conditions would be even worse. (photo: doc. Antara)

JAKARTA – The crypto market is revitalizing again, in response to the announcement of the Fed raising interest rates. Several cryptocurrencies such as Bitcoin, Ethereum, and others experienced a significant increase.

Meanwhile, the director of Monetary and Capital Markets for the International Monetary Fund (IMF) Tobias Adrian issued a warning regarding crypto conditions. In an interview with Yahoo, Adrian warned that the crypto market could potentially get even worse.

He added that more crypto projects will fail in the future. For information, the decline in the crypto market in recent months was triggered by the collapse of the algorithmic stablecoin TerraUSD (UST) which was released from its dollar peg in May.

The drop in UST then dragged the main Terra (LUNA) coin by over 99%. The stablecoin is considered vulnerable to collapse. Then he also named the largest stablecoin by market capitalization, namely Tether (USDT). According to him, fiat-backed stablecoins are more vulnerable to the possibility of a bank run soon.

Furthermore, Adrian believes that stablecoins will experience a massive sell-off following the recent announcement of rate hikes aimed at taming inflation. Recently, Senator Elizabeth Warren criticized the US Federal Reserve's aggressive monetary policy which has the potential to trigger a severe recession.

On the other hand, Adrian stated that he is focused on encouraging the crypto industry to comply with policies. The reason is proper regulation is the starting point for the entry of cryptocurrencies into the public. He added that managing cryptocurrencies is a tough task because in the crypto world alone there are thousands of crypto coins or tokens.