The new annual report of the International Monetary Fund (IMF) says that the cryptocurrencies do not represent a threat to global economic stability, Finance Magnates reports.
Every year, the IMF publishes a report on the state of the world economy. The latest report of this international organization is called "The Strong Way Forward", and one of its chapters is devoted to cryptocurrencies.
The document says that despite the impressive growth of the Crypto currency in 2017-2018, the total market value does not exceed three percent of the total assets of the four largest banks. Even during the peak demand for digital assets, this figure barely reached 6%.
Graphs below show the IMF-prepared indicators of the dynamics of the capitalization of the cryptocurrency, the comparison of the "greatest bubbles" in history, the bitcoin's volatility in comparison with some traditional assets, and the Sharpe coefficients:
IMF Charts, p.1
The report also mentions a significant concentration of capitalization among the "top" cryptocurrencies. So, bitcoin, Ethereum and Ripple account for about 80% of the total market capitalization.
In addition, despite the fact that there are more than 180 cryptocurrency exchanges in the world, over 80% of trade turnover falls on only the 14 largest trading floors.
According to experts from the IMF, the bitcoin futures on the CME and CBOE exchanges did not have a significant impact on the industry.
…futures volumes represent a small fraction of overall trading activity on the CME and CBOE and only 2.3 percent of reported trading in the Bitcoin cash market on [cryptocurrency exchanges]…
IMF Charts, p.2
For these reasons, IMF experts concluded that cryptocurrencies represent a "limited threat" to the traditional financial system. The organization believes that the real scope of the market is much smaller than those usually reported by the media.
At the same time, analysts believe that a significant increase in this area requires "vigilance on the part of regulators."
In a more positive light, the report discusses the technology of the distributed registry:
The technology underlying crypto assets—distributed ledger technology (DLT)—could also lead to more efficient market infrastructure.
The report also says that the IMF is ready to actively participate in the development of regulatory standards for new technologies.