Increased use of cryptocurrencies, according to a managing director at the International Monetary Fund (IMF), could be one of the consequences of Russia's and Ukraine's war.
According to a new Financial Times (FT) report, IMF first deputy managing director Gita Gopinath believes that Russia's wide-ranging international sanctions may split the current economic world order.
Crypto assets, central bank digital currencies (CBDCs), and stablecoins, according to Gopinath, may experience higher usage as a result. Regulation would be required as a result.
“All of these will get even greater attention following the recent episodes, which draws us to the question of international regulation. There is a gap to be filled there.”
According to Gopinath, the US dollar's dominance is likely to wane as a result of the sanctions imposed by the US in reaction to Russia's invasion of Ukraine on February 24.
In December, the IMF warned that if the almost $2.5 trillion crypto market gets more intertwined with the regular banking system, systemic financial stability risks could arise in certain countries, as part of a drive for international regulation.
Also, in January, the institution discussed how the growing popularity of cryptocurrencies, along with their price volatility, could have a negative impact on established markets.
The IMF's managing director, Kristalina Georgieva, recently stated that the organization prefers CBDCs to cryptocurrencies.
In addition, Georgieva said that if CBDCs are designed prudently, they can potentially offer more resilience, more safety, greater availability, and lower costs than private forms of digital money.
Adding to this, she noted that it is clearly the case when compared to unbacked crypto assets that are inherently volatile.