Digital Currencies Will Bring Mass Disruption Says Lagarde – Trustnodes

Digital Currencies Will Bring Mass Disruption Says Lagarde

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Christine Lagarde, IMF’s managing director, said we are about to see massive disruption from new financial technologies. Lagarde said:

“The way in which the new technologies are lowering the cost to make financial transactions more accessible, even in very small numbers, for people who do not earn much, who do not deposit much and who do not borrow much, and how those technologies can actually have a track record of the credit history of somebody, in a very short while, and then be able to direct those people towards the best use of their money, I think is already massively disruptive.”

On bitcoin specifically Lagarde said “I think we should just be aware of not categorizing anything that has to do with digital currencies as speculation, ponzi-like schemes. It’s a lot more than that as well.”

Lagarde manages an IMF created currency, called Special Drawing Rights (SDR) that intends to act as an international reserve currency. Asked whether they might create a cryptocurrency, she said:

“What we will be looking into is how this currency, the special drawing right, can actually use the technology to be more efficient and less costly.”

Lagarde said late last month that digital currencies, like bitcoin and ethereum, might be added to SDR to make it more attractive as an international reserve currency and to boost its use.

Lagarde further said at a Bank of England speech  that individuals and businesses might prefer digital currencies because:

“They potentially offer the same cost and convenience as cash—no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities.”

The IMF director, therefore, seems to have considerably changed her views on digital currencies and appears to have become a supporter of sorts as the International Monetary Fund eyes a role in fintech regulations, with Lagarde stating:

“My hope is that we can participate in that process because I see that as a very cross-border process. Typically central banks have authority over, you know the fed has authority over US, the ECB has authority over the Euro area, but it’s a cross-border issue and one that will impact people wherever they are, particularly if ever we move to digital currencies. So we’ll play a role.”

 

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