IMF Head sees larger role for crypto and blockchain
Christine Lagarde, head of International Monetary Fund, outlined the advantages of blockchain and bitcoin on her blog and it sent the price of bitcoin above $800. The cost of a single bitcoin BTCUSD, +1.22% was last valued at $8,109.29, up 0.7% on the day and off its early morning low of $7,972.55.It is a much-needed shot in the arm for all crypto asset enthusiasts and participants of cryptocurrency ecosystem.
In her blog post, she vividly explained, "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. This was one of the points I made in a speech at the Bank of England last year."
“Crypto-assets enable fast and inexpensive financial transactions while offering some of the convenience of cash. Some payment services now make overseas transfers in a matter of hours, not days,” Lagarde wrote in the April 16 post. In her view, "the fintech revolution will not eliminate the need for trusted intermediaries, such as brokers and bankers. There is hope, however, that decentralized applications spurred by crypto-assets will lead to a diversification of the financial landscape, a better balance between centralized and de-centralized service providers, and a financial ecosystem that is more efficient and potentially more robust in resisting threats."
Christine cites Global Financial Stability Report to suggest that if privately issued crypto-assets remain risky and unstable, there may be demand for central banks to provide digital forms of money. Reserve Bank of India, India's Central Bank, has announced its plans to introduce its digital currency. More countries are expected to follow suit.
The International Monetary Fund with a membership of 189 countries can be instrumental in serving as a platform for discussion and partnership in building steps towards formalizing a consistent regulatory mechanism for cryptocurrencies across the world. Christine Lagarde's words would encourage nations to come to a consensus on regulation of digital assets.
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