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IMF chief begs investors not to ditch crypto after LUNA, UST collapse

Kristalina Georgieva, executive director of the International Monetary Fund (IMF), discussed cryptocurrencies at the World Economic Forum’s annual meeting in Davos on Monday.

She urges people not to completely shun crypto after the recent collapse of algorithmic stablecoin terrausd (UST) and cryptocurrency terra (LUNA), Bloomberg reported. The Managing Director of the IMF said:

I beg you not to withdraw from the importance of this world. It provides all of us with a much faster service, at a much lower cost, and is more inclusive.

The head of the IMF emphasized that it is the responsibility of regulators around the world to put in place adequate safeguards and educate investors about the risks of crypto assets.

She points out that there are different types of crypto-assets with varying degrees of risk, emphasizing that there is a big difference between cash-backed and stablecoins algorithms, like LUNA.

Georgieva discussed more about stablecoins during a panel in Davos on Monday. We look at stablecoins, where there has been a lot of turmoil lately. If a stablecoin is backed by assets, 1-1, it will be stable, she further explained:

When it’s not backed by assets, but it is promised 20% return, it’s a pyramid (ponzi scheme)… What happens to the pyramid? … They eventually fell to pieces.