The boss of the IMF believes that crypto coins and blockchain technology could lead to a “more efficient and potentially more robust” financial system but only if soft cryptocurrencies regulations will be adopted.
A month ago, Christine Lagarde warned, in a blog note, about the “dark side” of cryptocurrencies, citing their high volatility and the fact that they can be used for money laundering or terrorist financing. But, as the boss of the IMF prepares to welcome in the Washington political leaders and central bankers for the traditional spring meetings, the former French Minister of Economy split Monday a new blog note where she shared another point of view, now recognizing the crypto and blockchain technology value but only under the conditions of soft regulations.
Undeniable security and speed
Drawing a parallel with the first financial bubble in history, the Tulipomania in Holland in the 17th century, Christine Lagarde first points out the following:
With more than 1,600 cryptocurrencies in circulation, it seems inevitable that many of them will not survive to the process of creative destruction. But those who take root will “have an impact on the way we put money aside, invest and pay our bills.
Christine Lagarde praises, in particular, the speed and the low-cost of the financial transactions conducted via cryptocurrencies blockchain.
The IMF leader also emphasizes the security of transactions enabled by the blockchain technology, stressing out, again, that the cryptocurrencies and blockchain technology could have applicability for governments but only under soft cryptocurrencies regulations.
A more balanced ecosystem
Christine Lagarde hopes that decentralized services stimulated by cryptocurrencies will lead to a diversification of the global financial landscape and ultimately, they will create a more balanced ecosystem, which will be, at the same time more efficient and more secure.
However, the IMF director remains vigilant, saying that cryptocurrencies must still “win the trust and support of consumers and authorities,” which, according to her, is only possible by the implementation of soft cryptocurrencies regulations a better definition of the blockchain role in the financial sector.