Christine Lagarde, Managing Director and Chair of the International Monetary Fund, could be a crucial ally for blockchain and cryptocurrencies in the coming months. Talk of regulation kicked up a notch following the G20 summit this week, with Lagarde being at the center of it.
An avowed fan of blockchain technology, Lagarde has gone on record as praising the potential that both blockchain and cryptocurrencies can offer. Even if it flies in the face of criticism from high profile public and private sector figures.
Cryptocurrencies Could Become More Stable Than Fiat
Lagarde first came out publicly in favor of blockchain technology and Bitcoin in 2016 when she presented a report entitled “Virtual Currencies and Beyond” at the World Economic Forum in Davos. It praised the potential of cryptocurrencies in slashing costs and improving speeds for the financial industry. In September 2017, Lagarde reaffirmed her belief in virtual currencies when she spoke to the Bank of England about the future of fintech. In the speech she said:
And yet, why might citizens hold virtual currencies rather than physical dollars, euros, or sterling? Because it may one day be easier and safer than obtaining paper bills, especially in remote regions. And because virtual currencies could actually become more stable.
Earlier this year Lagarde showed she was not blinded to the possibility that virtual currencies were used nefariously, stating in an IMF blog post that they offer a “potentially major new vehicle for money laundering and the financing of terrorism.” Nevertheless, she has been overwhelmingly positive in favor of virtual currencies, stating this year that, properly regulated, crypto assets can be a force for good:
Before crypto-assets can transform financial activity in a meaningful and lasting way, they must earn the confidence and support of consumers and authorities. An important initial step will be to reach a consensus within the global regulatory community on the role crypto-assets should play. Because crypto-assets know no boundaries, international cooperation will be essential.
A Voice of Reason
Summing up the feelings of many cryptocurrency enthusiasts, Lagarde has also talked on the subject of not buying into fear, stating that understanding the potential impact of cryptocurrencies on financial stability is key in order to “distinguish between real threats and needless fears.”
Having someone with a pragmatic, level-headed view of cryptocurrencies in a position of such influence could mark a turning point in the acceptance of digital currencies into mainstream society. As Lagarde says in her own words: “…we need an even-handed regulatory agenda, one that protects against risks without discouraging innovation.”