IMF Warns To Take Cryptocurrency Seriously
IMF Managing Director, Christine Lagarde has urged international banks and financial regulators to start giving cryptocurrencies serious consideration.
The International Monetary Fund (IMF) recently issued a statement which urged banks and financial institutions across the world to take cryptocurrency more seriously.
During the IMF Annual Meetings in Washington D.C. this year, the IMF Managing Director, Christine Lagarde, confirmed in a CNBC interview that the financial world is about to experience huge disruptions at the hands of cryptocurrency.
Lagarde questioned the general practice of banks and financial institutions who tend to stick their heads in the sand when it comes to the cryptocurrency industry. Lagarde stated that this attitude and lack of understanding is likely to put banks at greater risk.
While Lagarde chose to decline to comment on JP Morgan CEO Jamie Dimon, who denounced bitcoin as fraudulent, Lagarde did mention that the issue reaches beyond bitcoin, and implicates the very future of the finance industry.
Lagarde also cautioned against the practice of lumping cryptocurrencies together with Ponzi-schemes. According to Lagarde, this practice was indicative of a lack of understanding, as she believes that cryptocurrency has a lot more to offer.
Lagarde’s enthusiasm for cryptocurrencies did beg the question whether the IMF will soon be launching their own coins. While Lagarde did not explicitly rule out the possibility, she did point to the IMF’s Special Drawing Right (SDR). The SDR is an already existing sort of currency launched by the IMF which serves as an international reserve asset. Lagarde hinted that perhaps the SDR could be digitized in the near future.
Lagarde confirmed that the IMF is currently investigating methods in which to make the SDR can be more efficient and carry fewer costs. Blockchain technology could assist greatly in this.
According to Lagarde, the IMF also intends to play a role in regulatory policies that pertain to the Financial Technology industry in the future. Lagarde expressed her hope that the IMF might be helpful in this regard as she considered cryptocurrency transactions to be inherently cross-border.
Lastly, Lagarde applauded blockchain technology for its potential to make banking more inclusive and safer for everyone across the world. She used the example where women, in particular, are often subject to violence just because they have to carry cash. Lagarde stated that cryptocurrency can make all financial transactions more safe and discreet.