The managing director and chief of the International Monetary Fund (IMF) Christine Lagarde is in the crypto news today because of her statement in which she stated that blockchain innovators are shaking the traditional financial world and having a clear impact on incumbent players.
Lagarde made her comments in an interview that was hosted by CNBC on April 10 following a panel discussion that was focused on “Money and Payments in the Digital Age” which was also part of the 2019 Spring Meetings of the World Bank Group and the IMF in Washington, D.C.
Lagarde moderated the list of contributors to the preceding panel. She invited the co-founder and CEO of the cryptocurrency firm Circle, the CFO of Consumer & Community Banking at JPMorgan Chase named Sarah Youngwood, the European Central Bank’s (SCB) Benoit Coeure and Patrick Njoroge – the governor of the Central Bank of Kenya (CBK).
According to Lagarde, financial disruptors are now having a clear impact on the incumbents. She said that they are reshaping the system from within, all while pointing to JPMorgan Chase’s move to launch its own digital coin.
“I think the role of the disruptors and anything that uses distributed ledger technology, whether you call it crypto assets, currencies or whatever — and it’s far from the Bitcoins we used to talk about a year ago — that is clearly shaking the system,” she stated.
She also noted that blockchain has a transformative potential and that there are many assets that have so far been embraced by regulators and central banks. According to Lagarde, all of these entities recognize the positive effects that new inventions can offer for the business model of commercial banks. However, she also voiced a word of caution and stated:
“We have to be mindful of two things: trust, and the stability of the system […] we don’t want innovation that would shake the system so much that we would lose the stability that is needed.”
All of this puts the world of cryptocurrencies in the middle of being a fad and a revolution, according to Lagarde’s comments. However, everyone agreed that these markets need to be regulated by the same laws that apply to the traditional sector.
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