Daily Management Review

It's Time To Get Serious About Digital Currency, IMF's Lagarde Says


10/18/2017




It's Time To Get Serious About Digital Currency, IMF's Lagarde Says
According to the head of the International Monetary Fund, world's central banks and regulators now need to get serious about digital currencies as it is time when this currency would exert greater influence.
 
According to IMF Managing Director Christine Lagarde, emerging financial tech products that are already starting to shake up the financial services and global payments system are not being watched and given attention to by global financial institutions which is increasing risks for those institutions.
 
"I think that we are about to see massive disruptions," Lagarde told CNBC in a Facebook Live interview on the sidelines of the IMF Annual Meetings in Washington D.C.
 
Lagarde said it's important to look at the broader implications of technologies like digital currencies while replying to a question on whether she agreed with JP Morgan Chase CEO Jamie Dimon’s comments that bitcoin is a "fraud."
 
"I think we should just be aware of not categorizing anything that has to do with digital currencies in those speculation, ponzi-like schemes," she said. "It's a lot more than that as well."
 
There are speculations that its own cryptocurrency could be developed at some point in time by the IMF, and these speculations were not ruled out by Lagarde. Technology similar to cryptocurrencies could be incorporated into the IMF's Special Drawing Right (SDR), a currency the IMF created to serve as an international reserve asset, she pointed out while answering to the speculations of the international fund developing its own cryptocurrency.
 
"What we will be looking into is how this currency, the special drawing right, can actually use the technology to be more efficient and less costly," she said.
 
These comments were also reiterated by Lagarde while moderating a panel discussion featuring central bank officials and executives from fintech companies and the gathering was focused on fintech and the role of central banks. the IMF will play a role in regulating the fintech industry going forward, expects Lagarde, she said.
 
"My hope is that we can participate in that process because I see that as a very cross-border process," she said.
 
As new technologies lower the cost of financial transactions, Fintech is already causing disruptions in the financial services industry, Lagarde said. The banking system could be helped to be made more inclusive by distributed ledger technology like blockchain, she pointed out.
 
"I think of women in some of the developing countries that have to carry cash around who are at risk of violence and all the rest of it," she said. "If they can use their cell phone and operate in a much more discreet and efficient way, it would be terrific."
 
(Source:www.cnbc.com) 






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