Loading...The chief of the International Monetary Fund, Christine Lagarde, has praised the distributed ledger technology but made an emphasis on the possibilities to develop central banks digital currencies (CBD). In her speech Christine Lagarde has delivered at Singapore Fintech Festival she used to stress the title of her message: “Winds of change: the case for new digital currency.”
He preferred to use “cryptocurrencies” word only two times during her speech. Firstly, she underlined that “Even cryptocurrencies such as Bitcoin, Ethereum, and Ripple are vying for a spot in the cashless world, constantly reinventing themselves in the hope of offering more stable value, and quicker, cheaper settlement.” Secondly, Christine Lagarde deliberated that “cryptocurrencies seek to anchor trust in technology. So long as they are transparent—and if you are tech savvy—you might trust their services. Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust.”
She also promoted CBDC idea as strongly recommended for central banks to grasp by the fresh paper appeared in the IMF. As it has been stated that “this note also surveys research and pilot studies on CBDC by central banks around the world.” This paper bravely states that “cryptocurrencies such as Bitcoin, Ethereum, and Ripple—still early in their development cycle—offer competing forms of money.” The paper also consider cryptocurrencies as one of the competitors to the CBDC: “The last leg of the conceptual framework is to determine competitors to CBDC. These fall into four categories, but will vary by country: cash, commercial bank deposits, narrow finance, and cryptocurrencies. All except cash are evolving and rapidly gaining market share.”
IMF still keeps criticizing crypto saying that “сryptocurrencies are different along many dimensions and struggle to fully satisfy the functions of money, in part because of erratic valuations… Some new cryptocurrencies attempt to stabilize their value by controlling issuance according to a function of price deviations from a fiat currency or commodity (as in an exchange rate peg). Examples are Basecoin and Stablecoin.” Meanwhile paper also states that “cryptocurrencies are the least attractive option, receiving a low score in settlement speed because of current technological limitations (which may eventually be overcome). Their main advantage is anonymity.”
