IMF Director: Cryptocurrencies are shaking banking system, they must be monitored

11 Apr, 2019 | Updated: 11 Apr, 2019
by Fifi Arisandi
Opinion
IMF Director: Cryptocurrencies are shaking banking system, they must be monitored

The International Monetary Fund (IMF)’s Director, Christine Lagarde said cryptocurrencies are shaking the banking system.

After “commending” Ripple and Circle for their technology that will cannibalize the banking system, the International Monetary Fund (IMF)’s Director, Christine Lagarde gave another comment on cryptocurrency.

Read more: IMF praises Ripple and Circle, says banks will be ‘cannibalized’

In a panel discussion at the IMF Spring Meetings in Washington, Lagarde said that financial technologies, such as cryptocurrencies are “shaking” the banking system.

She believes that a clear evidence of cryptocurrencies’ impact is how commercial banks can be seen of changing their business models these days.

“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever ... that is clearly shaking the system,” said Lagarde.

Moreover, she thinks that such “disruptions” must be monitored to maintain stability and should be accompanied by regulation.

Quoting her statement to CNBC, “We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”

With many tech companies being reported of expanding their businesses to the financial sector, such as Facebook with its Facebook Coin plan, Apple to have its own credit card, and many more coming in the future, Lagarde believes that they must be subject to regulation.

Read more: Could Facebook Coin replace the US dollar?Starbucks, Samsung and 4 other major companies already working with crypto

“They will have to be held accountable so that they can be fully trusted,” she said.

Some banks, on the other hand, can be seen of embracing blockchain technology in their system. The most popular is JP Morgan & Chase’s newly-launched JPM Coin, which received more criticisms rather than compliments from business practitioners.

Read more: Facebook Coin vs. JPM Coin: which does the community prefer?

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