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IMF Chief Says Cryptocurrencies Need to Be Monitored

April 11, 2019 12:10
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The chief of the International Monetary Fund (IMF) Christine Lagarde, gained a reputation of being one of the saner voices when the cryptocurrency craze was at its peak.

In the past, she had talked about how cryptocurrencies were essential and that well-thought out regulations were important to the industry. On an occasion she had said, “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.”

On another occasion, she had stated that there’s quite a bit of ‘Dark Activity’ which the IMF is concerned about. They’re actively trying to prevent money laundering and finance of terrorism through Crypto. She went on to further add that regulators should care less about the entities and pay close attention on the activities.

Recently on a panel discussion, at the IMF Spring Meetings in Washington, Lagarde stated that financial technologies such as cryptocurrencies were “shaking the banking system.”

She said, “I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system.”

She added that it was necessary to monitor the ‘disruptions’ in an effort to maintain stability. Lagarde said, “We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”

Quite frankly, these words come as a blow since they came from a person who always talked highly of cryptocurrencies and their use cases.

In November last year she had made a strong case of central banks issuing their own cryptocurrencies. Lagarde referred to the diminishing role of money and state in terms of guaranteeing its money. The quest of common currency began since people started to travel in large scale for commerce some thousand years ago when the state became the guarantor of money.

But digital money undermines this structure, making the entire financial system obsolete. She had said: “Data is the new gold and physical cash is on the way out.”

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