IMF Christine Lagarde, managing director of the International Monetary Fund supports the idea of official cryptocurrencies. She declared that Central Bank issued cryptocurrencies could be the part of interesting networks. In these innovative networks, there would be a marriage between public and private sectors, each one offering their services.
IMF Christine Lagarde Opinion On Official Cryptocurrency
IMF Cristine Lagarde calls for the creation of official cryptocurrencies to occupy the space and regulate it. To her, in this way, this is the only way of fostering a legal space, not occupied by criminals. This is a revolutionary proposal. But it is as controversial as revolutionary because it gets banks again in a watchdog position.
Lagarde has always been a centered person when it comes to cryptocurrency related issues, mentioning their advantages and their drawbacks together. But now she is making quite the proposal by saying that cryptocurrencies should be bank regulated.
However, Lagarde does make a good point to justify her stance. She declared that:
“The advantage is clear. Your payment would be immediate, safe, cheap, and potentially semi-anonymous. And central banks would retain a sure footing in payments.”
In that way, central banks would regulate payments easily, because every payment would go through them. But at the same time, this whole proposal defeats the purpose and the concept of what cryptocurrency really is.
Lagarde’s New Proposal
The proposal of IMF Christine Lagarde is a bold one. From reading through their declarations, in her system, central banks would be in charge of the back end that deals with transferences and operations. Commercial banks would have the duty of presenting the system to customers and build products on top of that. She stated that:
The central bank focuses on its comparative advantage – back-end settlement – and financial institutions and start-ups are free to focus on what they do best – client interface and innovation. This is public-private partnership at its best.”
But Christine’s proposal ignores the fundamental issue of why people and institutions use cryptocurrencies: privacy and anonymity. Cryptocurrency is used because it serves a purpose: the need of sidestepping third-party institutions like banks. There is no difference between digital funds and an official cryptocurrency if every transaction of the latter goes through the Central Bank of any country.
However, she could be onto something and maybe that could be the focus that let cryptocurrencies really enter the universe of massive adoption in the not so distant future. To give closure, she declared about the new era that we live stating that:
“We float through a world of information, where data is the ‘new gold’, despite growing concerns over privacy and cyber-security. A world in which millennials are reinventing how our economy works, phone in hand.”