IMF warns that a global financial crisis is on the way. Global debt is increasing, and this is affecting economies. It also proposes that rapid development of financial technologies be carried out to reduce the challenges faced by the financial system.
The situation has been predicted to be worse than the great depression of 2008. What role will crypto and bitcoin play when this crisis starts?
Bitcoin (BTC) Price Today – BTC / USD
Growth deterred by financial crisis
Financial experts have predicted an upcoming financial crisis in two years. IMF has also issued a warning about another global financial meltdown. The sharp rise in lending as well as the failure to restrict how much asset managers and insurance companies can handle.
Presently, the debt levels have surpassed the numbers that led to the 2008 crash. IMF head, Christine Lagarde, reported that the total debt had surpassed 60% in public and private sectors alike. It has reached an all-time high of $182 trillion
The report stated:
“The sequence of aftershocks and policy responses that followed the Lehman bankruptcy has led to a world economy in which the median general government debt-GDP ratio stands at 52%, up from 36% before the crisis; central bank balance sheets, particularly in advanced economies, are several multiples of the size they were before the crisis; and emerging market and developing economies now account for 60% of global GDP in purchasing-power-parity terms – which compares with 44% in the decade before the crisis – reflecting, in part, a weak recovery in advanced economies.”
Lagarde added that companies and governments of developing countries are more vulnerable to this decline and this should be a wakeup call.
How crypto and bitcoin can play a major role
IMF talked about the development of bitcoin and other digital currencies. Lagarde believes that cryptocurrencies have potential risks as well as potential benefits. The cybersecurity risks are a cause for concern, but if they are developed, it could cushion the effects of the great depression.