Crypto
Home›Crypto›Regulation›IMF warns Brazil’s stablecoin activity is outpacing ca…
IMF warns Brazil’s stablecoin activity is outpacing capital flows
The IMF said stablecoin purchases are two to three times more sensitive to global shocks than traditional portfolio investment or foreign direct investment flows.
The International Monetary Fund warned that Brazil’s stablecoin market, especially US dollar-pegged tokens, has expanded rapidly since 2017 and now requires closer oversight as cross-border crypto activity grows faster than traditional capital flows, Cointelegraph reports.
In its Financial System Stability Assessment released Thursday, the IMF said stablecoins have been a key driver of growth in Brazil’s crypto asset market, with cross-border flows steadily increasing.
The report also highlighted risk sensitivities, saying stablecoin purchases are two to three times more sensitive to global shocks than traditional portfolio investment or foreign direct investment flows.
While Brazil’s central bank has taken steps to regulate crypto asset service providers, the IMF pointed to remaining gaps including customer asset protection, stablecoin issuance rules, and anti-money laundering and counter-terrorist financing compliance, Cointelegraph added. The IMF also referenced a measure in April where the central bank amended rules for electronic foreign exchange providers and restricted the use of digital assets for certain international payment and transfer services.