IMF’s Georgiva Terre calls for quitting all crypto after crash

An official of the International Monetary Fund said on Monday that people should not stay away from the crypto world after the recent collapse of the popular stablecoin.

TerraUSD, or UST, exploded earlier this month, creating a chain reaction that saw the overall value of the cryptocurrency market drop by hundreds of billions of dollars.

“I urge you not to deviate from the importance of this world,” said Kristalina Georgieva, managing director of the IMF, at the annual meeting of the World Economic Forum in Davos. “It provides us all with faster service, lower costs, and more inclusion, but only if we separate apples from oranges and bananas,” he said. Investors

Georgieva noted that there are different types of resources, including different levels of risk involved. For example, there is a big difference between stable coins, which are supported by cash and other assets, and relying on algorithms to maintain their value, such as terra currencies, he said. Stablecoins are a type of cryptocurrency that maintains a 1-to-1 value for reserve assets, such as US dollars.

“The less you support it, the more you should be prepared to take the risk of blowing it up,” Georgieva said. But he added that not all digital money should be tarnished with the same brush.

Georgieva was speaking with other members of the world’s financial elite at a panel discussing the central bank’s digital currency. France’s central bank governor, Franসois Villarre de Galhous, has dismissed concerns that central banks are slowly losing public confidence due to the rise in popularity of cryptocurrencies and decentralized money.

“My guess is more that in recent weeks, citizens have lost more confidence in crypto than the central bank,” Villarreal said, referring to Terra’s fall.

© 2022 Bloomberg

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