Christine Lagarde - Central banks - pay attention to digital currencies

Lagarde: Central banks must pay attention to digital currencies, and remember that new technologies must work for all.

This was neglected when everyone was «beating their chests» about how globalisation was helping the world economy to grow.

Let us make sure that these new technologies, and the way they will adapt the world economy, will benefit everyone, she concludes. Otherwise, by 2050 we might be «very sorry» that we didn't remind ourselves of that today.


Picture: Christina Lagarde - The head of International Monetary Fund


Christine Lagarde, the head of the International Monetary Fund, has warned central bankers not to close their eyes and ears to the rise of digital currencies.

She's giving a speech on what the global economy will look like in 20 years, at the Bank of England's conference on central bank independence in London today.

Lagarde says that digital currencies, such as Bitcoin, don't pose a major threat to the current status quo of fiat currencies today.

Digital currencies are too volatile, too risky, too energy-intensive to replace traditional currencies today, she argues. They're not scalable enough, they're too opaque for regulators to get a grip on, and some have been hacked, ex the Mt Gox bitcoin exchange which failed in 2014. 20 years, this situation may have changed, says Lagarde. Eventually, digital currencies could become safer and more reliable, especially in less stable regions.


The IMF chief predicts:

"So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money"

Central banks such as the BoE need to stay alert, for the moment when a digital currency «knocks on the door» and expects to be treated like sterling.

And remember the Bank of England already has make digital currency RSCoin, whit help of scientist at University College London.





Twitter @gstorro

the Guardian


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