The International Monetary Fund (IMF) renewed calls for better consumer protection and regulation of the cryptocurrency industry following the collapse of FTX and the subsequent drop in prices of BTC, ETH, and other major crypto assets.
in a report published On its website, the IMF said that regulating a highly volatile and decentralized system remains a challenge for most governments, requiring a balance between minimizing risk and maximizing innovation.
IMF Says Africa Needs Better Crypto Regulations
According to IMF data, 25% of sub-Saharan African countries have formally regulated cryptocurrencies, while the remaining two-thirds have implemented some restrictions. It also said that Cameroon, Lesotho, Sierra Leone, Ethiopia, Tanzania and the Republic of Congo had banned the crypto market, accounting for 20% of sub-Saharan African countries.
According to Chainalysis, Africa has one of the fastest growing crypto markets in the world, but it is also the smallest, with crypto transactions expected to peak at $20 billion per month in mid-2021. Kenya, Nigeria and South Africa are the countries with the highest number of users in the region.
IMF further emphasized Policy makers are worried too Cryptocurrencies can be used to illegally move money out of the region and evade local regulations designed to prevent capital outflows. Widespread crypto use could also compromise the efficacy of monetary policy, posing a threat to financial and macroeconomic stability.
The article also states that the risks increase significantly if cryptocurrencies become legal tenderCreating a threat to public finances if governments start accepting crypto as a form of payment.
Crypto investors suffer big losses in 2022
Meanwhile, investors in the crypto industry are set to lose $116 billion in 2022 due to a wave of bear markets and bankruptcies, Forbes said in a recent report.
According to the report, since March, 15 of the wealthiest investors and founders in the crypto space have lost more than half of their fortunes. As a result, industry analysts predict that the market will remain bearish till the end of 2023.
According to Forbes, Changpeng “CZ” Zhao, CEO of Binance, was responsible for one of the most significant losses. Zhao’s 70% stake in the cryptocurrency exchange was valued at $65 billion in March, but is now worth $4.5 billion.
Zhao was followed by Coinbase CEO Brian Armstrong, whose net worth dropped from $6 billion to $1.5 billion in March.
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