IMF chief: Central Banks Should ‘Consider’ Issuing Digital Currency
Christine Lagarde, head of the International Monetary Fund (IMF), recently gave her views on digital currencies issued by various central banks to prevent the incidents of fraud and money laundering.
Governments should consider offering their own cryptocurrencies to prevent the systems becoming havens for fraudsters and money launderers, Christine said referring to the fast-growing fintech industry. She made this statements at the Singapore Fintech Festival, which was held on Monday.
According to Christine, despite “not being entirely convinced” on the concept of cryptocurrencies more generally, there may be a case for states to issue government-backed tokens or similar assets.
“I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy,” she told the event.
“The advantage is clear. Your payment would be immediate, safe, cheap and potentially semi-anonymous… And central banks would retain a sure footing in payments,” said Lagarde.
Citing the example of reserve banks in countries such as Sweden and Canada where central bank digital currencies (CBDCs) were under serious consideration, Lagarde added that such a move would not only make transactions safer but also more common and consequently cheaper.
The IMF chief sounded hopeful of the future of digital currencies as she said it was legitimate to prefer digital cash. She stressed the fact that central banks should act as a protector to shield customers from money laundering activities and cybercriminals.
The IMF’s proposal is likely to be greeted warily by many digital currency operators who believe one of the main attractions of their technology is that it lies outside the mainstream banking system.
The involvement of a central bank could also be seen as imposing heavy-handed regulation that would slow down transactions and raise costs.
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