IMF head: Ignoring cryptocurrencies is not entirely wise
The head of the International Monetary Fund believes that cryptocurrencies can become a worthy contender for traditional currencies.
Speaking at a conference in London, IMF Director Christine Lagarde said that, in her opinion, “it is not entirely wise to write off virtual currencies.”.
It is noteworthy that she spoke about scenarios in which countries, primarily those with “ineffective government structures and unstable national currencies”, can resort to the direct adoption of cryptocurrencies.
“Instead of accepting currencies from other countries such as the US dollar, some of these economies may face the growing proliferation of virtual currencies. Call it “dollarization 2.0,” she said..
Changing consumer preferences in favor of “more affordable and safer” alternatives to existing currencies could be a determining factor in potential evolution. According to Lagarde, the likelihood of this scenario grows along with the stabilization of cryptocurrencies..
“In many ways, virtual currencies can compete with existing currencies. The best that central banks can do is to continue to pursue effective monetary policy, while at the same time accepting fresh ideas and responding to the new requirements that arise along with the development of the economy, ”she said..
At the same time, she noted that in the near future, the implementation of the scenarios given to her looks unlikely, since cryptocurrencies are “too unstable, too adventurous, too energy-intensive, and the technologies underlying them do not meet the scalability requirements”.
The IMF takes a balanced approach to cryptocurrency regulation. The fund outlined its position in a document published in January 2016. Lagarde has also spoken out in support of blockchain-based financial applications, and the IMF is already conducting its own research in this area..