Bitcoin which always remains at the receiving end of government’s clampdown today got an unexpected support from IMF Chief, Christine Lagarde praising cryptocurrencies and suggesting the transformation it could bring in the way people save and invest. This positive statement from the IMF chief helped the Bitcoin prices to regain some of its strength and continue trading near its important level at $8200.
In her blogpost titled, “An Even-handed Approach to Crypto-Assets” she wrote how cryptocurrencies like Bitcoin could enable fast and inexpensive transactions while underlying technology could be used to make the financial market function more efficiently.
Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto-assets that survive could have a significant impact on how we save, invest and pay our bills. That is why policymakers should keep an open mind and work toward an even-handed regulatory framework that minimizes risks while allowing the creative process to bear fruit.” Ms Lagarde wrote in her blogpost.
Shrugging off the fears of the risk arising from fintech revolution to the centralised organisations and established economic structures, she said that the growth of decentralized applications spurred by crypto-assets will lead to a diversification of the financial landscape, a better balance between the centralized and decentralized service providers and a more efficient and robust financial ecosystem.
Moreover, she added that if the crypto-assets continue to pose threat or remain unstable for a long period of time, Central Banks can come into the picture to provide digital forms of money.
“If privately issued crypto-assets remain risky and unstable, there may be demand for central banks to provide digital forms of money.”
However, she reiterated the fact that crypto-assets needs to earn the confidence and support of consumers and authorities in order to transform financial activity in a meaningful and lasting way.
“An important initial step will be to reach a consensus within the global regulatory community on the role crypto-assets should play. Because crypto-assets know no boundaries, international cooperation will be essential.”
“Understanding the risks that crypto-assets may pose to financial stability is vital if we are to distinguish between real threats and needless fears. That is why we need an even-handed regulatory agenda, one that protects against risks without discouraging innovation”
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