In her blog post “Addressing the Dark Side of the Crypto World”, IMF Chair Lagarde calls for global cryptocurrency regulation. She believes that only with the help of regulations, the cryptocurrency market will be able to scale up and become more stable.
14 March, AtoZForex – The chairwoman of the International Monetary Fund (IMF) Christine Lagarde has once again shared her outlook in regards to the cryptocurrency market. This time, she has stated that the digital currency markets need to be regulated by the same laws that are applied to the traditional markets.
IMF Chair Lagarde Calls for Global Cryptocurrency Regulation
In her blog post on the IMF official website, Lagarde has referred to the Blockchain technology as an “exciting advancement that could help revolutionize fields beyond finance.” The blog post “Addressing the Dark Side of the Crypto World” has highlighted the qualities of this phenomenal technology.
Yet, Lagarde also has added that global regulators need to “understand the peril that comes along with the promise.” In regards to the specific ways to establish regulations that will protect consumers in the cryptocurrency markets, Lagarde stated that one must “fight fire with fire.”
She has mentioned two examples, with the first one being the usage of the digital ledger technology (DLT) to “create registries of standard, verified, customer information along with digital signatures.” Other option includes the usage of artificial intelligence and cryptography.
Why crypto markets need global regulations?
Thanks to the decentralized nature of cryptocurrencies, Lagarde sees a potential for their use in money laundering and financing terrorism. She also mentioned that cryptocurrencies could threaten the stability of traditional financial markets. The global regulations need to be developed with the help of IMF:
“No country can handle this challenge alone […] Since crypto-assets know no borders, the framework to regulate them must be global as well.”
Lagarde has set goals to provide cryptocurrency consumers with the same level of protection as the investors in the traditional markets have. She has referenced a number of agencies that are good examples of regulatory diligence. These included the Financial Stability Board (FSB) and the Financial Action Task Force (FATF).
In addition, IMF Head has mentioned that the US Securities and Exchange Commission (SEC) along with other regulators are commencing the application of securities laws to the initial coin offerings (ICOs). Lagarde concluded her post by stating that the cryptocurrency market is “somewhere in between” a craze and a revolution.
As IMF Chair Lagarde calls for global cryptocurrency regulation, she also believes that only global approach can “harness the potential of crypto-assets while ensuring that they never become a haven for illegal activity or a source of financial vulnerability.”
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