A representative of the International monetary Fund (IMF) in an article on the question of how crypto the global currency, currencies change policy. Crypto-currencies could replace traditional Central Bank money in the future, more and more, what the IMF is facing new challenges. For Fiat currencies, it still sees opportunities to keep pace.
The International monetary Fund the threat, which results in a rising crypto-adaptation for the Central Bank money is, slowly but surely aware of. The article says, the Dong He, Deputy Director of the Monetary and Capital Markets Department of the IMF, in the IMF magazine “Finance & Development” published. In it, he speaks directly to that crypto-currencies are in competition to traditional Fiat currencies, and this could push back on the medium to long term.
Monetary policy in the age of crypto-currencies
As he writes, have sown the global financial crisis and the Bailout of many large banks in the population, the scepticism that Central banks should, in fact, have the monopoly of money. This results in the creation of the Bitcoin, a currency for the dominant role of the Central banks and the global financial institutions has resulted, among other things. So should also the IMF, the question of what the rise of Non-Central Bank money for the future of monetary policy means.
Diminishes the Power of Central banks to make financial policy more and more people require currencies to Crypto? It looks like it. The way the Central banks influence on national economies – first and foremost, the fixing of the key interest rate – relies on Fiat currencies as a tool. He puts it even more sharply: If Central Bank money is no longer the operative factor of an exchange of an economy is monetary policy irrelevant. He compares the development of the countries in which the U.S. Dollar is the national currency as a reserve currency has replaced the Central banks no longer play a role for the national economy.
What are the options for Fiat currencies?
In response, He proposes that the Central Bank should go a step in the direction of the crypto. So it would be for the digital age more and more attractive. The crypto-currencies underlying Blockchain technology, it is as a driving force. So, he leads fast and cheap transactions of crypto currencies, without Intermediaries, as a great progress. Also the Head of the IMF, Christine Lagarde, has brought to the game, you should in addition to your tried-and-tested core business and also have always an eye to the “fresh ideas and new Demands of economic development”. So Fiat currencies, crypto can learn currencies. He also holds a own crypto-currency of a Central Bank for a possible scenario.
In addition, Central banks need to encourage their governments to regulate the use of crypto-currencies. Thus, regulatory Arbitrage and an unfair advantage over harder-regulated Assets is to be prevented. As the measures He announced strict Anti-money laundering measures the prevention of the financing of terrorism, the strengthening of consumer protection and the taxation of crypto to win.
At the end of the day, Central banks must keep the Public trust in Fiat currencies. In addition, you must remain in a digital and decentralized service economy in the game. You can remain relevant in that they represent a more stable and less volatile units of account as crypto-currencies. At the same time, you should reap the benefits of a digital Economy.