n what seems unexpected, the International Monetary Fund (IMF) claimed cryptocurrency has the potential to transform the financial system.
The Managing Director of IMF, Christine Lagarde, in a blog post highlighting the importance of crypto-asset, claims it can transform how we save and invest.
Lagarde affirmed that cryptocurrency could help the financial markets function more efficiently, as it’s fast and inexpensive to use.
In the past years, cryptocurrency has not only become one the means of payment but also as an alternative method of holding and moving funds.
IMF Managing Director, Christine Lagarde
But digital currency, unlike other currencies, is not under the control of any government, and the highest attempt by any government is a demand that income from cryptocurrency is declared for tax purposes.
To state the obvious, trust is still a major challenge as government across the world are distancing themselves from crypto-assets. Hence, there’s the need for the market to earn the confidence as well as the support of both users and government authorities.
“An important initial step will be to reach a consensus within the global regulatory community on the role crypto-assets should play,” Lagarde wrote. She reiterates that international cooperation will be essential since crypto-assets know no boundaries.
She calls for the understanding of crypto-assets related risks as it could affect financial stability and that an even-handed regulatory agenda towards protecting against risks without discouraging innovation.
One cannot overlook the crackdown on the cryptocurrency market from social media with government reminding citizens about the lack of regulation for the digital currency. But, in spite of the crackdown, businesses are still adding it as a payment option. And it’s being argued that cryptocurrency would eventually go mainstream and replace real cash.
Maybe Lagarde’s stance will change the way governments across the globe see digital currencies.
“If privately issued crypto-assets remain risky and unstable, there may be demand for central banks to provide digital forms of money,” she wrote. She also envisioned governments playing in the digital currency market.
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