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Christine Lagarde: Central Banks Should Explore Issuing Digital Currency

Christine Lagarde, Managing Director and Chairwoman of the International Monetary Fund (IMF), stated she believes the “exploration” of central bank digital currencies (CBDCs) should be contemplated as demand for digital money continues.

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“I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy,” said Lagarde, in a prepared speech during the Singapore Fintech Festival on Wednesday.

According to Lagarde, central banks in China, Sweden, Uruguay, and Canada are “seriously” considering issuing digital currency.

“They are embracing change and new thinking – as indeed is the IMF,” said Lagarde.

Cryptocurrencies like bitcoin (BTC), Ethereum (ETH), and XRP are “vying for a spot in the cashless world, constantly reinventing themselves in the hope of offering more stable value, and quicker, cheaper settlement.”

In a new report published by the IMF, titled “Casting Light on Central Bank Digital Currency,” the IMF stated, “cryptocurrencies are different along many dimensions and struggle to fully satisfy the functions of money, in part because of erratic valuations.”

When assessing forms of money like cash, CBDCs, commercial bank deposits, and cryptocurrencies, the IMF established “cryptocurrencies are the least attractive option.”

The score was due in part to “current technological limitations,” in regard to settlement speed.

In the end, the IMF believes research on digital currency needs deeper evaluation due to “deep and difficult and have far-reaching implications.”

Lagarde stated digital currency motions “great promise” for the unbanked as well as privacy, however, the implementation of such technologies could risk financial integrity and stability.

“This setup would be good for users, bad for criminals, and better for the state, relative to cash. Of course, challenges remain. My goal, at this point, is to encourage exploration,” said Lagarde.

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IMF Chief Christine Lagarde Believes Cryptocurrency Regulation is ‘Inevitable’

International Monetary Fund (IMF) Chief Christine Lagarde has stated she believes cryptocurrency regulation is “inevitable.”

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“It’s clearly a domain where we need international regulation and proper supervision,” said Lagarde at the World Government Summit in Dubai.

“There is probably quite a bit of dark activity.”

According to Lagarde, the IMF is attempting to avoid cryptocurrencies from being consumed to launder money or back terrorism.

Lagarde has argued regulators should shift focus from exchanges, towards who is doing what, and whether the activities are properly overseen.

In December, the U.S. Securities and Exchange Commission (SEC) and the FBI began tightening down on suspected fraud in fundraising by both companies and traders.

“We encourage fintech, we encourage innovation, but we want to make sure that all of our financial markets are safe and aren’t being used for illicit activities,” stated U.S. Treasury Secretary Steven Mnuchin at the World Economic Forum in Davos.

“Cryptocurrencies like Bitcoin, we should be looking at these very seriously, precisely because of the way that they can be used, particularly by criminals,” British Prime Minister Theresa May stated at Davos.

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IMF Pleas for Global Collaboration on Cryptocurrency

The International Monetary Fund (IMF), an association whose goals include fostering global monetary cooperation, securing financial stability, and reducing poverty, has stated cryptocurrency deserves a “greater international discussion and cooperation among regulators.”

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“When asset prices go up quickly, risks can accumulate, particularly if market participants are borrowing money to buy. It’s important for people to be aware of the risks and take the necessary risk-management measures,” said IMF spokesman, Gerry Rice.

In September of 2017, Christine Lagarde, Managing Director of the IMF, said she believes cryptocurrencies like Bitcoin could give fiat currencies a “run for their money”.

Lagarde continued telling reporters it is “not wise” to disregard the technology and that cryptocurrencies have the potential to produce “massive disruptions”.

Last Week, Steven Mnuchin, U.S. Treasury Secretary, stated that the Financial Stability Oversight Council is “very focused” on the technology.

“We want to make sure that bad people cannot use these currencies to do bad things,” Mnuchin stated.

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IMF’s Christine Lagarde Says Cryptocurrencies To Cause ‘Massive Disruptions’

Christine Lagarde, Managing Director of the International Monetary Fund (IMF), believes it’s time for central banks and regulators to get serious about cryptocurrencies.

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“I think that we are about to see massive disruptions,” Lagarde told CNBC, during the IMF Annual Meetings in Washington D.C.

Lagarde challenged JPMorgan Chase CEO Jamie Dimon’s heavy criticisms of bitcoin as a “fraud” last month, and advised against the cryptocurrency sphere as speculative or fraudulent.

“I think we should just be aware of not categorizing anything that has to do with digital currencies in those speculation, ponzi-like schemes,” Lagarde said.

“It’s a lot more than that as well.”

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Christine Lagarde Tells Central Banks Cryptocurrencies Should Not Be Ignored

LONDON, ENGLAND – Christine Lagarde, Managing Director of the International Monetary Fund (IMF) has publicly come out in favor of cryptocurrencies after she commented on the matter during a conference in London earlier this week.

“In many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.”

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Lagarde continued to address potential circumstances in which a country might use crypto noting that the technology would be particularly useful to nations with “weak institutions and unstable national currencies.”

Japan’s Financial Services Agency has approved 11 cryptocurrency exchange companies moving the country apart from its neighbors that are constriction their control on cryptocurrencies.

“Instead of adopting the currency of another country, such as the U.S. dollar, some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0,” said Lagarde.

Largarde believes these technologies are a distant possibility. Like many, she believes cryptocurrencies are “too volatile, too risky, too energy intensive, and the underlying technologies are not yet scalable.”

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