Crypto market collapses aren’t a worry for global financial stability, the International Monetary Fund (IMF) said Tuesday in a report that nonetheless raised grave concerns about the global economy. The world economy is being battered by high inflation and potentially its second recession in just over two years, the IMF said, given the impact of the Ukraine war and continued COVID lockdowns.

However, markets like bitcoin, isolated from conventional banks, don’t seem to be a worry, the report says. That relative calm comes despite recent collapses, such as the terraUSD stablecoin and Three Arrows Capital fund – turbulence that has made some regulators keen to exert greater control on the burgeoning market. “Spillovers to the broader financial system have been limited so far,” the IMF said, citing a “dramatic sell-off that has led to large losses” for crypto investors.

In a June report, the European Systemic Risk Board said the continued rising popularity of crypto could mean wider financial market threats arise “quickly and suddenly. ” The IMF itself has also called for more regulation of the sector, and has warned El Salvador to quit using bitcoin as legal tender. Standard-setters worldwide are also working to set out exactly how banks should start getting into crypto markets.

The Basel Committee on Banking Supervision has proposed a cap on bitcoin holdings – alongside a hefty capital requirement that would limit banks’ ability to lend based on crypto reserves. Read more: Banks’ Bitcoin Holdings Should Be Capped, Basel Committee ProposesIn an interview published Tuesday, the European Central Bank’s Elizabeth McCaul suggested bank supervisors would in future look at individual lenders’ crypto exposures as part of regular annual reviews. .