In a surprising turn of event, Christine Lagarde head of the International Monetary Fund (IMF) has endorsed the use of cryptocurrency especially Bitcoin. In her latest blog post, Lagarde describes cryptocurrencies as having a potential to significantly, “impact on how we save, invest and pay our bills.”
Lagarde the Managing Director (MD) of the International Monetary Fund (IMF) since 5th July 2011 highlighted the importance of cryptocurrency affirming that the digital money, “could help the financial markets function more efficiently, as it is fast and inexpensive to use.”
Her positive comments coincided with the momentum gained by bitcoin with the price just above to $8,000 USD, more than $1,000 in mid-April following months of steady decline. Although it is unclear if these gains are directly attributable to the news. The IMF boss said that “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.”
She believes that just as other innovative technologies have transformed our lives over the years, cryptocurrency could significantly impact our spending habits. Therefore, she calls on policymakers to keep an open-mind and proffer balanced regulatory framework to exploit the benefits while also minimizing any risks.
A balanced approach towards Cryptocurrencies
Her latest remark about cryptocurrency highlights the balanced view the IMF boss has towards cryptos. Though the remarks may seem supportive of cryptocurrencies, she had in the past called for caution when dealing with digital currencies. In an address in March, she said:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The same reason crypto-assets—or what some people call crypto-currencies—are so appealing is also what makes them dangerous. These digital offerings are typically built in a decentralized way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions. [/perfectpullquote]
Lagarde has now said that since cryptocurrency operates across every sector of the world an important step should be taken by the global regulatory communities to reach an agreement on how cryptocurrency should play in our financial activities.
International cooperation would be required if cryptocurrency can gain the confidence of investors. For the benefits of cryptocurrency to be properly harnessed, industry players must keep abreast of rapid development in market and technologies. “We must act quickly to close the knowledge gaps that inhibit the effective monitoring of crypto-assets. There should be systemic risk assessment and timely policy responses, as well as measures to protect consumers, investors, and market integrity.” Lagarde concluded.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.