- Referring to the collapse of the algorithmic stablecoin TerraUSD, Georgieva took to encouraging continued efforts to build value.
- Nevertheless, Georgieva did stress that it wasn’t helpful to paint all cryptocurrencies with a single brush.
It’s not every day that a top official of the International Monetary Fund (IMF) offers some words of encouragement to the legions of Crypto Bros and “degens” that ply the cryptocurrency space.
But on Monday, speaking at the World Economic Forum’s annual meeting in the exclusive ski resort of Davos, Switzerland, Kristalina Georgieva, the IMF’s Managing Director said,
“I would beg you not to pull out of the importance of this world. It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas.”
Referring to the collapse of the algorithmic stablecoin TerraUSD, which took down much of the cryptocurrency industry with it, far from dancing on the grave of the industry, Georgieva took to encouraging continued efforts to build value.
The IMF Managing Director also added that it was the responsibility of regulators from across the globe to put up guardrails and offer education to protect investors.
Georgieva attempted to discern the wheat from the chaff when it comes to cryptocurrencies, noting that different types of assets exist with different associated risks.
“The less there is backing it, the more you should be prepared to take the risk of this thing blowing up in your face.”
Nevertheless, Georgieva did stress that it wasn’t helpful to paint all cryptocurrencies with a single brush.
Regulators and financial institutions may be doing a victory lap given the recent collapse of TerraUSD, an episode which is now attracting the attention of regulators everywhere from South Korea to the U.S. Securities and Exchange Commission.
A police report regarding the collapse of TerraUSD was filed in Singapore, where Terraform Labs has a registered office.
As the fallout of the TerraUSD collapse continues to ripple through the cryptosphere, investors and regulators alike will be studying it closely to determine if this was an isolated incident or inherent systemic weakness in a highly unregulated sector.
