The head of the International Monetary Fund, Christine Lagarde, said that central banks around the world should consider issuing a digital currency. Speaking at an event in Singapore, Lagarde stated that this could make transactions in digital currency safer.
Digital payments have increased over the years by challenging governments and central banks around the world. Regulators have already expressed concern about digital currencies and called for greater control over them.
“I think we need to consider the possibility of issuing a digital currency,” Lagarde said in Singapore. “There can be a new role for the country in which it can deliver money for the digital economy”.
“The advantage is clear: your payment will be immediate, safe, cheap and potentially semi anonymous. Central banks will maintain their security in payments.”
Lagarde said that central banks in Canada, China, Sweden and Uruguay “seriously consider” the digital currency proposals. She added that while the trend for the digital currency “is not universal”, it must be considered “serious, consciously and creative”.
A virtual currency issued by a central bank would be the responsibility of the State, just like the paper money, and not by a private company. This will help the consumers by making transactions safer, more accessible and as a result cheaper. Although the technology underpinning digital assets has been praised for accelerating financial transactions and reducing costs, the anonymity behind trade in cryptocurrency remains a concern among regulators.
The Governor of the Bank of England, Mark Carney also stated that cryptocurrencies such as bitcoin must be regulated so that state institutions can oppose illegal activities and protect the financial system.
The statement by the IMF chair marks a serious cornerstone in the policy of the financial organisation. Lagarde herself said some time ago that the anonymity of currencies like bitcoin means that they are being used by criminals and terrorists.
It was the IMF earlier this year that warned the Pacific State of the Marshall Islands to slow down its plan for the introduction of national cryptocurrency called Sovereign. The organisation then pointed out that the country risks being cut by the US dollar, which the Marshall Islands use as protection against inflation.
