IMF’s Lagarde: Ignoring Cryptocurrencies ‘May Not Be Wise’

Thehead of the International Monetary Fund (IMF) thinks that cryptocurrencies might provide conventional government-issued ones a “run for their money.”

Speakingat a conference in London, IMF chief Christine Lagarde told attendees that she believes “it may not be wise to dismiss virtual currencies.”

Notably, she detailed possible circumstances where a nation– especially those with “weak institutions and unstable national currencies” may in fact welcome another straight.

“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,”she stated.

Oneof the owning elements behind that possible development would be a shift in customer choice for brand-new currencies that are “easier and safer” than existing ones. If cryptocurrencies “actually become more stable,” she stated, That situation might be more accelerated.

Lagardewent on to state:

“So 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.”

Thatstated, Lagarde kept in mind previously in her speech that such a result is, in her view, a remote possibility, stating that cryptocurrencies are “too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable.”

Todate, the IMF has actually promoted a well balanced technique on cryptocurrency policy, voicing that position ina January 2016 staff paper Lagarde has likewise voiced support for monetary applications of blockchain, a topic that the IMF has actually checked out on an organizational level.