In the International Monetary Fund's April 2018 Global Financial Stability Report, the organization found that "at present, crypto assets do not appear to pose macrocritical financial stability risks."
"It is impossible to know the extent to which crypto assets may transform the financial infrastructure and whether most new crypto assets are likely to disappear as in past episodes of technological innovation (as many tech companies did during the boom of the late 1990s, for example)," wrote the IMF. "Before they can transform financial activity in a meaningful and lasting manner, crypto assets will first need to earn the confidence and support of consumers and financial authorities."
It's still early days for cryptocurrency, but the IMF urged regulators to be vigilant about potential financial stability challenges and highlighted "a few aspects that deserve monitoring." In particular, the organization raised concerns about leveraged trading of cryptocurrencies, though it acknowledged that the low correlation between cryptocurrencies and other assets "suggests that the risk of spillovers from idiosyncratic price moves in crypto assets to the wider market may be limited at this point."
Other regulatory bodies have previously addressed worries about leveraged cryptocurrency trading. In March, the European Securities and Markets Authority instituted a 2:1 leverage limit for cryptocurrency contracts for differences (CFDs) at the same time that it barred the sale of binary options (cryptocurrency-based or otherwise) to retail investors. In November 2017, the United Kingdom's Financial Conduct Authority cautioned consumers about the risks of highly-leveraged CFDs.
In its report, the IMF also remarked upon the integration of crypto-assets into mainstream financial products. The organization assessed that if the crypto-asset "investor base" widens, the performance correlation between crypto-assets and traditional assets may increase – a development that could raise the possibility of financial shocks being transmitted "during episodes of risk aversion." Most immediately, authorities seem to be worried about cryptocurrency volatility impacting traditional markets. It's conceivable, but probably unlikely, that shocks could be transmitted in the opposite direction as well.
The third and final aspect highlighted by the IMF was the cross-border nature of cryptocurrencies. Due to the transnational nature of cryptocurrencies, the IMF said, "disruptions" could occur across "national boundaries," a factor that could also be influenced by "differing national regulatory approaches."
Altogether, the organization's survey of the cryptocurrency markets seemed much more reactionary than prescriptive. The IMF collected and compiled information about efforts by regulators and policymakers across the globe, but the organization seems just as uncertain as the rest of us regarding the future of cryptocurrencies and blockchain technology.