IMF Chief Says Cryptocurrencies Are Shaking Up the System As Poll Shows Crypto Takeover in 5 Years
International Monetary Fund managing director, Christine Lagarde, continues to acknowledge the growing impact of cryptocurrencies on traditional financial assets, and is calling for the need to act wisely and with regulatory solutions in mind.
Appearing at the IMF’s spring meeting on Wednesday and following a panel discussion on the global network of money and payments, Lagarde made several statements addressing blockchain and crypto.
Speaking to CNBC, Lagarde says,
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto assets, currencies, or whatever – and it’s far from the bitcoins that we used to talk about a year ago – that is clearly shaking the system.”
In an effort to maintain the integrity and stability of the financial system, which is being impacted by tech companies at a rapid pace, the IMF chief is advocating for regulatory restraints to guide the wave of innovators.
“They will have to be held accountable so that they can be fully trusted.”
“We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”
In a recent Twitter poll conducted by the IMF, respondents indicate that cryptocurrencies will be widely accepted within the next five years, with the nascent technology eclipsing cash, mobile phone apps and bank cards as a method of payment.
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A panel of 19 leaders in finance and technology have held two meetings in the recent past with IMF chief Lagarde to explore the overall impact of the latest technological innovations on the financial services sector. On November 14, 2018, the IMF held a High-Level Advisory Group meeting in Singapore focused on fintech.
Lagarde has expressed her concerns that incumbents who put their heads in the sand, while computer scientists push forward with scaling solutions to make cryptocurrencies go mainstream, will be cannibalized by the next era of fintech.
“I think in the banking system at large in many, many countries, the difference will not be between those who are disrupted and those who survive. The difference will be between those who are cannibalized because they’re not seeing it coming, and they’re not embracing it, and those who self-induce that cannibalization.”
The members of the High-Level Advisory Group are:
- Jeremy Allaire, Chief Executive Officer, Circle
- Dr. Long Chen, President, Alibaba Digital Economy Institute (formerly Chief Strategy Officer of Ant Financial Services Group)
- Santiago Fernandez de Lis, Chief Economist of Financial Systems and Regulation, BBVA
- Robert Garrison, Managing Director and Chief Information Officer, Depository Trust and Clearing Corporation
- Sharon Yang, Deputy Assistant Secretary, International Financial Markets, US Treasury
- Erwin Haryono, Head of Fintech Office, Bank Indonesia
- Chris Larsen, Executive Chairman, Ripple
- Klaus M. Löber, Head of Oversight Division, Directorate General Market Infrastructure and Payments, European Central Bank
- Adam Ludwin, Chief Executive Office, Chain
- Blythe Masters, Board Member, Digital Asset
- Greg Medcraft, Director, Directorate for Financial and Enterprise Affairs, Organization of Economic Cooperation and Development
- Professor Robert Merton, MIT Sloan
- Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore
- Mu Changchun, Deputy Director-General of the Payment and Settlement Department, People’s Bank of China
- Patrick Murck, Fellow at the Harvard Berkman Klein Center
- Marco Santori, President and Chief Legal Officer, Blockchain.com
- Carolyn Wilkins, Senior Deputy Governor, Bank of Canada,
- Bradley J. Wiskirchen, Chief Executive Officer, Kount
- Nasir Zubairi, Chief Executive Officer, Luxembourg House of Financial Technology