The International Monetary Fund (IMF) isn’t terribly worried about the financial stability risks posed by cryptocurrencies. Nonetheless, the organization expressed limited concerns about leveraged trading of cryptocurrencies, the integration of crypto-assets into mainstream financial products, and the cross-border character of these digital assets.
In the International Monetary Fund's April 2018 Global Financial Stability Report[1], the organization found that "at present, crypto assets do not appear to pose macrocritical financial stability risks."
"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)," wrote the IMF. "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."
It's still early days for cryptocurrency, but the IMF urged regulators to be vigilant about potential financial stability challenges and highlighted "a few aspects that deserve monitoring." In particular, the organization raised concerns about leveraged trading of cryptocurrencies, though it acknowledged that the low correlation between cryptocurrencies and other assets "suggests that the risk of spillovers from idiosyncratic price moves in crypto assets to the wider market may be limited at this point."
IMF Global Financial Stability Report 2018, Page 39
Other regulatory bodies have previously addressed worries about leveraged cryptocurrency trading. In March, the European Securities and Markets Authority instituted a 2:1 leverage limit[2] for cryptocurrency contracts for differences (CFDs) at the same time that it barred the sale of binary options (cryptocurrency-based or otherwise) to retail investors. In November 2017, the United Kingdom's Financial Conduct Authority
