Managing Director of the International Monetary Fund, Kristalina Georgieva, finds that the collapse of Terra blockchain's UST stablecoin shouldn't be a reason to abandon the crypto market.
At the World Economic Forum’s annual meeting, she advised not to draw out the importance of the crypto world, Bloomberg reports.
Georgieva mentioned the advantages of the sector such as faster service, reduced costs, and increased inclusion. At the same time, the IMF executive highlighted the importance of differentiating the assets. According to her, regulators around the world are responsible for controlling the industry and offering education to protect investors.
Georgieva mentioned that different types of assets present various levels of risks. She compared stablecoins that are backed by cash with the ones that rely on algorithms to keep their target price. Next, Georgieva said the less a stablecoin is backed, the more is the need to prepare for the risks.