International Monetary Fund (IMF) Chair Kristalina Georgieva during the World Economic Forum’s annual meeting on Tuesday said the collapse of Terra’s algorithmic stablecoin UST should not make people abandon cryptocurrencies. Kristalina Georgieva believes the crypto market is important as it offers faster service, much lower costs, and more inclusion.
IMF’s Kristalina Georgieva Hails Crypto Despite Terra Collapse
During the World Economic Forum’s annual meeting in Davos, Kristalina Georgieva urges investors not to abandon the crypto market despite the collapse of Terra’s UST and LUNA as not all digital currencies are the same, reported Bloomberg.
“I would beg you not to pull out of the importance of this world. It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas.”
IMF’s Kristalina Georgieva thinks every investment asset comes with some level of associated risks, and so do cryptocurrencies. Therefore, stablecoins backed by cash and other assets are different from stablecoins supported by algorithms. Stablecoins are cryptocurrencies supposed to maintain a 1:1 peg with reserve assets like the US dollar.
The collapse of algorithmic stablecoin TerraUSD or UST caused massive liquidation across the crypto market. This should be a lesson for investors to avoid such risky assets that are less backed. Thus, investors should continue to invest in cryptocurrencies.
