Last month, IMF sounded the alarm about a global economic downturn that will see many countries around the world grappling with inevitable inflation. This month, a top IMF employee has shared interesting insights that contextualize the real-world impacts left by crypto’s recent collapses. Antonio Pascual is the senior economist of IMF who also oversees macro research. He has two decades of expertise in analyzing global financial trends and passionately studied the changes happening in the international economic scene.
He is positive that the aftermath of the crypto crash compounded by crypto lending platforms like Celsius crashing and crypto hedge fund 3AC going bankrupt was devastating for the crypto community. However, the macroeconomic impact of this does not permeate into the real-world economy according to him. The larger picture of the global realm of finance remains undeterred and the failures were received well within the crypto ecosphere.
Crypto Did Not Domino Global Economic Consequences
The IMF analysis head official stated that crypto circles are generally built by small-scale communities that take up a mere fraction of the world’s entire population. Indeed, a lot of the world is only just beginning to welcome cryptocurrencies into their frays. While a lot of American citizens and crypto users from other countries did face a substantial pinch caused by their investments amidst the crypto collapse, they make up an insignificant chunk. The larger realm of international finance operations continues to be detached from this scene.
Cryptocurrency falls under the list of industries that are only just beginning to burgeon, expand and evolve. For this reason, we haven’t seen the peak and halcyon days of crypto yet. A lot more people will be beginning their journey with Web3 in the days to come. Crypto has become a market favorite, especially in developing countries undergoing recession where citizens are preferring crypto transactions over physical money. This is due to the reasons crypto being a speedier, cost-effective way to transact across international finance setups. The failure of Web2 infrastructure in adequately driving their monetary needs also factors into this.
However, he raised red flags that just because most of the world is now safe from being impacted from crypto’s fall does not guarantee it’ll happen the next time too. Perhaps one day in the future when crypto payments are being used synonymously with conventional money on a mainstream basis, we would face this problem. Pascual added that this could also be an issue for crypto as it is not a good sign for countries to make the switch to crypto amidst growing socioeconomic volatility.