The International Monetary Fund (IMF) thinks crypto has the potential to put pressure on the banking sector.
In a new report, the IMF says technological innovation is changing financial services. The report notes that the banking sector could lose market share if the crypto ecosystem grows to become a mainstream alternative to bank deposits or current lending options.
The IMF explains,
“Stronger competition for bank deposits through stablecoins held on crypto exchanges or private wallets may push local banks toward less stable and more expensive funding sources to maintain similar levels of loan growth.
Beyond the direct loss in net interest income, a loss of customer relationships and data on transactions would also undermine credit risk assessment for clients and their ability to