The global economy is continuing to change at a fast pace, and so is its attitude towards cryptoassets. The IMF’s managing director, Christine Lagarde’s latest blog post on cryptoassets shows a shifting perspective towards digital currencies as well.
Christine Lagarde is a notable lawyer and politician. She is currently serving as the Managing Director of the International Monetary Fund since her re-appointment in 2016. Lagarde held various powerful ministerial positions in the French government. She was ranked 8th in Forbes’s World’s 100 Most Powerful Women list, 2017.
In her post,” An Even-handed Approach to Crypto-Assets”, she talks about the potential benefits of crypto trading. Lagarde carefully listed the benefits of virtual currencies in the modern world. DLT (Distributed Ledger Technology) is a potent medium which can bring about changes in the existing financial system. The Australian Securities Exchange already plans to use DLT for managing equity transactions. DLT can also be used for securely storing records.
She conveys that an “even-handed approach” towards Fintech can spur positive changes. The usage of decentralized applications will create a more balanced and robust financial system. Lagarde also notes that cryptoassets may pose serious risks if they become more mainstream. The price volatility, potential leveraged trading etc associated with crypto trading cannot be neglected. She advocates the need for global cooperation in the regulation of cryptoassets.
In another blog post, “Addressing the Dark Side of the Crypto World,” she analyzed the threats that come with crypto-assets. Given the anonymity and decentralized nature of cryptoassets, they could be used as vehicles for money laundering. She cited the shutting down of a darknet marketplace, Alphabay, which had exchanged more than $1 billion through crypto. She affirmed the need for regulatory technology in the crypto world for shutting criminals and protecting consumers.
Global Financial Stability Report
The April 2018 Global Financial Stability Report (GFSR) talks about the pros and cons of crypto-assets. Under the chapter “A Bumpy Road Ahead”, the report says that cryptoassets can unite the benefits of traditional currencies and commodities. The frauds revolving the same have been weighed too. The report notes that cryptoassets hold a very small share in the global financial system (less than 3%) as of now, and thus they pose limited challenges to traditional currencies and there’s nothing to be worried about!
Those in charge of making new policies will have to work on a global scale. Innovative thinking and cooperating with other departments is the need of the hour to ensure that the average cryptoasset investor might experience more financial stability.
The future of cryptoassets
Even with all the loopholes in crypto trading, it has the potential to influence centralized financial institutions. In spite of the dismissal of Bitcoin by Jamie Dimon (CEO, JPMorgan Chase) and Ray Dalio (Billionaire investor), there’s still hope for cryptoassets. The recent stance of Christine Lagarde conveys the same. She says:
“..we need an even-handed regulatory agenda, one that protects against risks without discouraging innovation.”
Also Read:
https://blog.unocoin.com/tron-gets-back-in-the-game-at-top-10-91fbbaee73e5
