Christine Lagarde, managing director of the International Monetary Fund, gave her opinion about cryptocurrency regulation. The Internation Monetary Fund is one of the most important economic institutions in the world. Christine thinks that regulation should not stop innovation in the cryptocurrency world. Despite this, she recognizes the need for regulation to stop the use of cryptocurrencies for illicit purposes.
Christine Lagarde Opinion
Christine Lagarde expressed her points of view about regulating cryptocurrencies. In an article titled “A regulatory approach to Fintech” published in the OMFIF bulletin magazine, she lets us know her moderated approach at regulating cryptocurrencies and Fintech. Being the managing director of the IMF, her opinion is important and could influence the actions of many.
Christine advocates for a balanced take on the subject. She views the need for regulation and understands it. But she also recognizes that careless regulation can freeze innovation. She states:
“Regulators face a difficult task. On the one hand, they must protect consumers and investors against fraud and combat tax evasion, money laundering and the financing of terrorism. On the other, they must beware of stifling innovation that benefits the public.”
making a special focus point about the equilibrium between regulation and freedom.
Despite all this, she does recognize the importance and use cases of cryptocurrencies in today’s world. About the possibilities that blockchain (or as she refers to, DLT) brings to the table she declares that:
It can enable faster and cheaper transactions, store records securely and execute so-called smart contracts automatically.
How To Regulate Cryptos
But not only does she gives her opinion about the task of regulation. She also gives recommendations about the right way of facing this task. Christine Lagarde thinks that a global approach to the issue is the best take. And she explains why:
“National authorities have reacted with varying degrees of regulatory stringency. If this uncoordinated response continues, activity will simply migrate towards more lightly regulated jurisdictions in a race to the bottom. Because crypto assets know no borders”
Her take is logical, and that is why banning cryptocurrencies is not a very effective approach. Trading just moves to other to other less dangerous latitudes. But a global policy is about to be enforced by the Financial Action Task Force, one that cannot be ignored by members. The guidelines of this institution must be followed if the state wants to remain as a member of the economic international community.
But above all, Christine Lagarde thinks that cryptocurrencies could be the future of finance. She concludes by declaring that:
“we must keep an open mind about crypto-assets and fintech, not only because of the risks they pose but also because of their potential to improve our lives”