Cryptocurrency

IMF: Cryptocurrencies Are Shaking The Current Financial System

IMF Cryptocurrencies Are Shaking The Current Financial System

Blockchain technology and cryptocurrencies is a disrupting technology. It changes entire industries for the better and even the International Monetary Fund’s (IMF) managing director agrees.

IMF: Cryptocurrencies improve our current system

The managing director of the IMF, Christine Lagarde, told CNBC that the new Distributed Ledger Technology (DTL) has a positive impact on our society. She said that people call DTL many different things, such as blockchain or cryptocurrencies. However, she was clear on the fact that bankers and regulators see the benefits of the technology when comparing it to our current options. She said:

“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system.”

While “shaking the system” could be a good thing, Lagarde argued that institutions also need stability. The financial industry looks into the technology but wants to be sure that stability is there as well. JP Morgan is an example of a large financial institution that experiments with technology. JP Morgan has even created their coin “JPM Coin.” They will use the technology in their current business to save both time and money. The institution will see how stable the new technology is and Lagarde said the following in regards to stability:

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“We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”

IMF: Cryptocurrencies are here to stay

Meanwhile, Lagarde recently said that states should consider a state-backed cryptocurrency. She argued that the digital economy is here whether we like it or not and many countries are already looking into the very subject. Sweden might be the first country to launch a digital currency. However, Sweden is not the only one that evaluates the idea.

Moreover, it is not only countries and the financial market that is affected. Many different kinds of companies find ways to implement the technology. Facebook wants to create “Facebook Coin” to use within its wide range of services. It could bring the social media giant over $19 billion in extra revenue. Another example is the biggest retailer in Switzerland who now accepts cryptocurrencies such as bitcoin, ethereum and ripple among others.   

Lagarde also touched upon the subject of regulation. The new disruptive technology companies need regulation before entering the banking sector.

“They will have to be held accountable so that they can be fully trusted,” she said.

However, the world changes fast our current system need to adapt. Lagarde gave an example of the central bank in Kenya who issued a banking license to a Telecom company. We need to widen our perspective because, in reality, anything is possible, but we have to take one step at the time.

Image Source: “Flickr”

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