International Monetary Fund (IMF) says there is a need for regulators to coordinate on cryptocurrencies globally because there is increasing risks of surging crypto prices.
IMF cites risks including the use of cryptocurrencies in money laundering, financing of terrorist activities and tax evasion and fraud. This is in addition to losses caused to investors.
These risks become worse if participants are borrowing money to buy cryptocurrency, said the report.
“When asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy. It’s important for people to be aware of the risks and take the necessary risk-management measures”.
It is not the first time these risks are citing.
Regulation of cryptocurrencies has been a significant concern for many governments in the recent past. Including India, China, and South Korea put in place ad hoc unplanned regulations. Thus aiming at limiting usage of cryptocurrencies such as banning ICOs.
The announcement by IMF comes a week barely after U.S. Treasury Secretary Steven Mnuchin said the Financial Stability Oversight Council had a working group to ensure cryptocurrencies are not using to do bad things.
Christine Lagarde, managing director of IMF, said in September last year that cryptocurrencies can give government-issued money a run for their money and should not be ignored.