October 19, 2020

Will virtual money shake the global financial system?

According to the head of the International Monetary Fund (IMF), it's time for the central banks and regulators of the world to pay attention to digital currencies.
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According to IMF CEO Christine Lagarde, global financial institutions are at risk of not tracking down and understanding emerging fintech products, which have already begun to rock. financial services and global payment system.

Lagarde told CNBC in an interview on Facebook Live on the sidelines of IMF annual meetings in Washington D.C.

When asked if she agrees with JPMorgan Chase CEO Jamie Dimon that bitcoin is a "fraud", Lagarde said it's important to look at the broader implications of technologies like digital currencies.

"I don't think we should just associate digital currencies with speculation or ponzi scams. Digital currencies mean more than that," she said.

Lagarde failed to rule out that the IMF could stay in issuing a virtual currency of its own. She points out that the Special Drawing Rights of the IMF (SDR), a currency created by the IMF to serve as an international reserve asset, can incorporate technology similar to virtual currencies.

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"What we will be looking at is how this coin, the SDR, can actually use Blockchain technology more efficiently and less costly," she said.

Ms. Lagarde ran a discussion on Thursday focusing on fintech and the role of central banks, including central bank officials and executives from fintech companies. Lagarde told CNBC that she hopes the IMF will play a role in regulating the fintech industry.

"My hope is that we can participate in this cross-border process," she said.

According to Lagarde, Fintech has caused disruptions in the financial services industry because new technologies reduce the costs of financial transactions. She points out that technology like blockchain can help make the banking system more inclusive.

"I think women in some developing countries have to carry cash with them who are at risk of violence. If they can use their cell phones and use (currency)," she said. number) more cautiously and efficiently, that would be great ".