IMF cautious about crypto
A report from the International Money Fund highlighted the fact that bitcoin and other cryptocurrencies could actually affect global cybersecurity. Specifically, the report stated that the “rapid growth” of cryptocurrency assets could create “new vulnerabilities in the international financial system”. The report certainly comes at an interesting time, as both U.S. and U.K. lawmakers are pressuring their respective governments to create a more concrete and clear framework regarding cryptocurrency regulation.
This is not the first opinion offered by the International Money Fund. In fact, the Managing Director of the IMF and French lawyer/politician, Christine Lagarde, has referenced bitcoin and blockchain technology in general various times. Specifically, she has previously acknowledged that bitcoin could potentially lead to less of a demand for central banks in general, hinting that blockchain could be utilized in certain sectors such as lending and commodity trading. Although Lagarde has acknowledged the potential of blockchain technology, she has also been adamant that cryptocurrency has to be regulated in general, stating that its own technology could be used to regulate it. Ultimately, it is clear that the international organization is concerned about potential issues while still acknowledging that it can be a force in various financial sectors.
The International Monetary Fund was created in 1944 to help promote global financial stability and cooperation. It is widely considered one of the most important organizations with regards to exchange rates, international trade, and lending to its over 190 member countries. It has also played an integral role when it comes to advising and aiding developing nations, as well.
Many consider the IMF report a response to the fact that more financial institutions are considering utilizing blockchain-based products, such as XRapid, which many banks have signed on to use in the near future. This isn’t surprising, considering that Ripple as a company is looking to enter the global payments space, since blockchain technology allows for cross-border payments to be conducted quicker and more efficiently. Ripple Lab’s chief executive Brad Garlinghouse seems more than optimistic about XRapid’s potential, claiming that “dozens” of banks would be using it very soon. IBM has also recently announced a Stellar-based payment solution, as well.