The International Monetary Fund (IMF) released their quarterly report that focuses on Bitcoin and cryptocurrencies. The IMF states that the rapid growth of bitcoin and other cryptos can certainly influence the international financial system. However, the report added that digital coins do not pose an immediate danger to the global economy.
With that said, the summary of the report titled “World Economic Outlook: Challenges to steady Growth” published by the IMF comes to a very different conclusion. The report says if bitcoin and other cryptos experience rapid growth in the future, then that could potentially represent an additional source of risk for the global financial system. The report says:
”cybersecurity breaches and cyberattacks 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.”
Although the crypto market has dipped by over 80 percent on average since its peak in December last year, major progress has been made in terms of adaptation and regulation.
A variety of businesses and individuals see digital money as a potential alternative to real-world currencies. And hackers have begun to use the crypto market or wallet vulnerabilities to steal billions. This is one of the problems to be solved with the growth of Bitcoin and altcoins.
Establish systems to deal with cyberattacks
Jeon Ha-jin, the chairman of the South Korea Blockchain Association, said “Stealing cryptocurrencies is similar to stealing cash, and exchanges will continue to be targeted by hacking attacks in the long-term.”
He added that establishing systems to deal with the outcome of cyber-attacks cannot be overemphasized.
In South Korea, many cryptocurrency exchanges have long ago begun to have their customers ‘credit balances secured by large insurance providers so that in the event of an emergency it can be guaranteed that users’ crypto holdings are secured.
A similar path has been taken by the American crypto exchange Gemini.
The IMF report describes existing problems that need to be addressed in order to secure and establish the long-term adaptation of cryptocurrencies as an alternative asset class. We are curious about further developments in this area.