The Managing Director of the International Monetary Fund (IMF), Christine Lagarde recently published a blog post where she highlighted the importance of crypto-assets and claims they can transform how we save and invest.
Lagarde affirms that cryptocurrency could help the financial markets function more efficiently, as it is fast and inexpensive to use.
In the past years, cryptocurrency has not only become one the means of payment but also an alternative method of holding and moving funds.
But digital currency, unlike other currencies, is not under the control of any government, and the highest attempt by any government is a demand that income from cryptocurrency is declared for tax purposes.
To state the obvious, trust is still a major challenge as governments across the world are distancing themselves from crypto-assets. Hence, there's the need for the market to earn the confidence as well as the support of both users and government authorities.
“An important initial step will be to reach a consensus within the global regulatory community on the role crypto-assets should play,” Lagarde writes. She reiterates that international cooperation will be essential since crypto-assets know no boundaries.
Lagarde also calls for the understanding of crypto-assets related risks, as it could affect financial stability, and proposes an even-handed regulatory agenda towards protecting against risks without discouraging innovation.
One cannot overlook the crackdown on the cryptocurrency market, from private and government bodies alike, reminding citizens about the lack of regulation for the digital currency. But, in spite of the crackdown, businesses are still adding it as a payment option. Some even argue that cryptocurrency would eventually go mainstream and replace real cash.
Maybe Lagarde’s stance will change the way governments across the globe see digital currencies.
“If privately issued crypto-assets remain risky and unstable, there may be demand for central banks to provide digital forms of money,” she wrote. She also envisioned governments playing in the digital currency market.