IMF Proposes Crypto-Risk Assessment Matrix (C-RAM) for Country-Level Crypto Risks Assessment

IMF’s C-RAM framework assesses crypto risks, while warning against Bitcoin adoption in El Salvador due to financial stability concerns.
IMF Proposes Crypto-Risk Assessment Matrix (C-RAM) for Country-Level Crypto Risks Assessment
IMF Proposes Crypto-Risk Assessment Matrix (C-RAM) for Country-Level Crypto Risks Assessment

The International Monetary Fund (IMF) just published a working paper on September 29 titled “Assessing Macrofinancial Risks from Crypto Assets.”

The Crypto-Risk Assessment Matrix (C-RAM) is a framework that the paper’s authors, Burcu Hacibedel and Hector Perez-Saiz, have proposed. This matrix is intended to assist nations in identifying possible hazards in the bitcoin business and comprehending how regulators may address these issues.

Three primary phases make up the C-RAM. It begins by determining the importance of cryptocurrencies to the entire economy using a decision tree.

Analyzing indicators that are used to monitor conventional financial markets is the second step.

The final phase discusses the global macro-financial risks associated with cryptocurrencies and how those risks can impact a nation’s overall financial stability.

El Salvador has repeatedly been urged not to adopt Bitcoin as its national currency by the International Monetary Fund (IMF). El Salvador’s decision to recognize Bitcoin as a legal tender was strongly pushed by the IMF in January 2022.

The integrity of the nation’s financial system, the dependability of financial transactions, and the protection of consumer interests are all seriously threatened by the use of Bitcoin as an official medium of exchange, according to the IMF.

On September 7, the Financial Stability Board (FSB) and the International Monetary Fund (IMF) worked together to create a joint document containing policy recommendations. As requested by the Indian G20 chair, this was carried out.

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