As Bitcoin and other cryptocurrencies spark government concern, the Managing Director of the IMF, Christine Lagarde, has warned that they could cause major disruptions.
Lagarde directed advice to central banks and regulators, encouraging them to act in regard to learning about the fast emerging financial technology.
While governments in China, South Korea and Russia have moved to restrict cryptocurrency activity to varying extents, Lagarde spoke in a light of cautiously embracing the disruptive technology.
According to CNBC, speaking at the IMF Annual Meetings in Washinton D.C, Christine Lagarde said: “I think we should just be aware of not categorizing anything that has to do with digital currencies in that speculation, ponzi-like schemes… It’s a lot more than that as well.”
This comment was made in response to a question of where she stood on the negative opinion of digital currencies recently expressed by the JPMorgan CEO, Jamie Dimon. Dimon said: “The bigger they get, the more governments are going to close them down.”
She went as far as to not rule out the IMF engaging in the creation of its own digital currency, referencing the IMF’s Special Drawing Right (SDR). The SDR is exists as means of supplementing official reserves of other countries.
Lagarde indicated that cryptocurrency technology could power the IMF’s special currency, she said: “What we will be looking into is how this currency, the special drawing right, can actually use the technology to be more efficient and less costly.”
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This year Bitcoin in particular has soared, having continuously broken price records exceeding $5,000 per unit. Today Bitcoin has achieved a new top price of $5,800, closing in quickly on the $6000 mark.
Upon reaching this current record price, Bitcoin has experienced a 480 per cent price increase this year alone. This spike has been sparked by the potential reversal of a major Chinese ban recently emplaced upon digital currencies.