The International Monetary Fund (IMF) had warned the Group of 20 (G-20) nations that the widespread proliferation of crypto assets could lead to banks losing deposits and curtailing lending.

The IMF's report on "Macrofinancial Implications of Crypto Assets" given to the G-20 in February during a meeting in India, was made public on Monday, days after the collapse of crypto-friendly banks Signature Bank (SBNY), Silicon Valley Bank (SVB), and Silvergate Bank (SI).

"A widespread proliferation of crypto assets comes with substantial risks to the effectiveness of monetary policy, exchange rate management, and capital flow management measures, as well as to fiscal sustainability. Moreover, changes may be required to central bank reserve holdings, and the global financial safety net, yielding potential instability. Finally, banks may lose deposits and have to curtail lending," the report said.

The report also stated that "there are many risks associated with crypto assets, although the significance and relevance of specific risks differ by country circumstances.”

(By Amitoj Singh)