The Head of the International monetary Fund (IMF) has expressed once again to the topic of crypto-currencies on the IMF Blog. Surprisingly, you praised in your last post, the advantages and prophesied currencies, a shift from government-issued currencies to Crypto.
Already in mid-March, had expressed Lagarde about crypto-currencies. The then title of your post The dark side of The crypto world.
The Tenor of the article was that crypto-currencies should be observed by the IMF in detail, to get to the “emerging threat” in the handle, and to secure a stable financial system. On the other hand, your focus was on the anonymity of Kryptos, which are, in your opinion, a potentially large risk in terms of combating money laundering and the financing of terrorism.
For this purpose, in particular, it noted with respect to AlphaBay. The platform was up last year, is the largest Online marketplace for criminal activities on the Internet (illegal drugs, hacking, firearms, and toxic chemicals) before it went offline. Anonymous crypto-used currencies on the platform for money laundering and the financing of terrorism on a large scale. So AlphaBay is a Prime example of the danger posed by crypto-currencies, Lagarde.
In her latest contribution, however, is on the benefits of crypto-currencies, and prophesied even a shift from government-issued currencies to currencies Crypto.
The most remarkable statements (freely translated), we would like to present at this point.
The technology behind crypto-currencies – including the Blockchain – is an exciting advance that could help to revolutionize areas beyond the financial sector. It could, for example, the financial inclusion of people by providing new, cost-effective, establish payment methods, which on Bank accounts is lacking.
Lagarde speaks, almost as expected, but also the comparison with the Tulip mania of Holland in the 17th century. Century recorded, and the Dotcom bubble.
With more than 1,600 crypto-Assets that are in circulation, it seems inevitable that many will not survive the process.
Nevertheless, she is apparently also aware of the fact that crypto-currencies are Throughout the no a short-term mania, but permanently establish:
So, as some of the technologies that have emerged from the Dot-Com Era, our lives have changed, could crypto-currencies that survive will have a significant impact on how we store our bills in the future, to invest and pay.
She also advertises in the paper for an open debate with the topic of political decision-makers, and a balanced regulatory framework, the risks for investors are minimized, and at the same time the creative process is not limiting.
The underlying technology, the Distributed Ledger technology could help financial markets to work more efficiently. Self-executing and self-enforcing Smart Contracts the necessity of some mediators might eliminate.
What crypto-currencies mean for the global financial stability?
With regard to the question of whether crypto-currencies threaten the global financial stability, it takes a well-known opinion, such as before the G20 summit of Finance Ministers, a meeting by the President of the Bank of England commented that:
Our preliminary assessment is that crypto-currencies pose in view of their small volume and limited Connections to the rest of the financial system, there is no immediate danger. Nevertheless, the Supervisory authorities should remain vigilant: crypto currencies can strengthen […] the Transmission of economic shocks, they should be more integrated into the common financial products. For regulatory authorities, it might be more difficult to guarantee the stability of a decentralized financial system. The Central banks may have in the event of a crisis, more difficulties, as a lender of last resort.
This is a risk from our point of view, but also with the IMF and the Central banks as the Central Organ, such as the financial crisis of 2008 has shown. Finally, Lagarde explained in the post:
Before crypto currencies can change financial activities in a meaningful and lasting way, they must earn the trust and support of consumers and authorities. An important first step will be to reach within the global regulatory community to reach a consensus on the role, the crypto should play Assets.
All in all, Lagarde draws a very positive conclusion and cryptographic speaks to currencies of legitimacy. In many Parts we need to right your even.
So around 1,600 crypto are also, in our view, the currencies too much. A cleansing of the market, if all of a sudden or as a gradual process, inevitably. The major crypto-currencies (Bitcoin, Ethereum, … ?) will establish a new Era, as the surviving Tech companies of the Dot-Com bubble.
Nevertheless, it is also clear that regulatory measures will in the future play an important role. In this respect, 2018 will continue to be an exciting year in terms of the subject of regulation of crypto-currencies.
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