In an interview with CoinDesk, Antonio Garcia Pascual, Deputy Chief of the Global Market Analysis Division at the International Monetary Fund (IMF), said crypto’s nosedive hasn’t caused a similar downturn in the “real economy.” The crypto sector’s market cap has slid from $3T to $873B since November 2021.

Why should we care?
Pascual suggests the larger economy is mostly insulated from crypto volatility because the crypto space isn’t large enough to affect all monetary flows—at least not yet. As more countries adopt crypto as legal tender or incorporate it into their financial infrastructure, the chance of “global risk spillovers” increases, he said. Currently, only El Salvador and the Central African Republic have adopted bitcoin as legal tender; both countries have encountered serious financial troubles since that time, only aggravating what Pascual dubbed “issues related to macro and financial stability.” This may be cause for alarm, but Pascual said the blockchain technologies underlying the crypto space may have constructive public use, especially as a cross-border payments mechanism. If Pascual’s predictions are representative of the IMF’s, then we may expect the IMF to throw its weight behind blockchain projects, but steer clear of riskier crypto initiatives.