Speaking at the Singapore Fintech Festival, Christine Lagarde highlighted the fast-growing Fintech industry and the part cryptocurrencies have in it. She referred to Central Bank Digital Currencies (CBDC) being opted for by the international community.
Lagarde shared that cryptocurrencies will help the unbanked in remote areas and help in the digital payment transformation. She even touched on the importance of anonymity especially for credit scores to be fair to individuals. However, anonymity can cause problems due to criminal activities.
Her hope of an anonymous system of cryptocurrencies blended with countries is through Central Bank Digital Currencies (CBDC). These CBDC’s is in a system where authentication is needed of a customer’s due diligence procedures and transactions recorded. Thus identities would not be disclosed. It will keep crime at bay as anonymity will be lifted if suspicion arose.
Her speech follows IMF’s report titled ‘Casting Light on Central Bank Digital Currencies’ The report expanded on CBDC’s, why central banks might issue CBDC’s, and how they will design it.
Initial discussion of CBDC was started with the Bank of England, followed by the central bank of Sweden and the central bank of Uruguay close to implementing these CBDC’s.
Cryptocurrency influencers such as Anthony Pompliano tweeted about Lagarde’s speech about Central Bank Digital Currencies.
The Head of the IMF gave a speech today that legitimized cryptocurrencies.
She said state-backed digital currencies could provide financial inclusion, security & consumer protection, and privacy in payments.
The virus is spreading and now the IMF is infected! 🚀
— Pomp 🌪 (@APompliano) November 14, 2018
His tweet contained Lagarde’s positivity on cryptocurrencies for financial inclusion, security & consumer protection, and privacy in payments.
However, there is a potential problem if central banks do get in the picture of cryptocurrencies. It will lead to tighter regulation, which in turn leads to transactions become costlier and slower.
Nevertheless, companies that want to make use of Blockchain technologies will want a more regulated space of the digital currencies, and so they might be pleased with central banks adopting the idea.
Image Source – Flickr
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