IMF on Bitcoin: Fire with fire
Written by Mark Evans
In a blog on its site, the International Monetary Fund head Christine Lagarde has warned of the dangers that cryptocurrencies pose, suggestion that blockchain technology could help hold them to account and return control to traditional agencies.
Entitled Addressing the Dark Side of Crypto the blog praises the ability of cryptocurrencies to power financial inclusion, but points to the ‘peril that comes along with the promise’.
Lagarde points to money laundering and terrorist financing as major issues that will require tackling, and suggests ‘fighting fire with fire’ by using distributed ledger technology (DLT) to speed up information-sharing between market participants and regulators.
Coupled with biometrics and artificial intelligence, cryptography could, she believes, enhance digital security and identify suspicious transactions in close to real time - helping enforcement to stop illegal transactions.
However, Lagarde notes that to be effective, international cooperation will be needed because, as she says “crypto-assets know no borders, the framework to regulate them must be global as well”.