In a conference, the Managing Director of the International Monetary Fund ( IMF ), Christine Lagard, speaks about the blockchain technology behind Bitcoin (BTC).
The Managing Director of the International Monetary Fund ( IMF ) begins by saying that the technology behind the cryptocurrencies is known as “ blockchain “ . This can deliver a lot of benefits which even led central banks around the world to consider issuing their digital currencies .
Lagarde states :
“Those who have a shared interest in maintaining safe online transactions need to be able to communicate seamlessly. The technology that enables instant global transactions can create registries of standard, verify customer information along with digital signatures. Better use of data by governments can also help free up resources for priority needs and reduce tax evasion. This includes evasion related to cross-border transactions.“
Despite the positive recognition of the virtues of cryptocurrencies , she reminds readers that what makes cryptocurrencies such as Bitcoin ( BTC ) so attractive is also the same thing that makes them so dangerous . The IMF Managing Director points out the fact that all cryptocurrencies build a decentralized network. That does not need a central authority . This characteristic gives cryptocurrencies trades an element of anonymity that can result in money laundering and more other crimes. But the ability to finance terrorism is the most dangerous of all crimes .
She said that volatility is another threat that cryptocurrencies like Bitcoin ( BTC ) pose. Also the ability to create considerable vulnerabilities to the traditional financial market .
What about regulations?
Christine Lagard ends her blog post by calling for a regulatory network to face up to the challenges of cryptocurrencies . She revealed that many organizations have developments on their first insights. Later this will be used to set up a regulatory framework to which several countries already agreed to accept .
She concludes saying that “ countries will have to decide collectively that this path is worth pursuing . Promisingly , the Group of Twenty [ G20 ] has agreed to put crypto – assets on the agenda of its November 2018 summit in Argentina.“
Lagard also praised the capabilities that the blockchain behind Bitcoin ( BTC ) has to offer. States that its potential can harness to monitorize all cryptocurrency activity . A hope to fight “ fire with fire “ refers to the fact that the same innovations powering cryptocurrencies can also use to help impose regulation over them .
Lagard claims the following:
“ Biometrics , artificial intelligence , and cryptography can enhance digital security. Also identify suspicious transactions in close to real time . This would give law enforcement a leg up in acting fast to stop illegal transactions . This is one way to help us remove the “ pollution “ from the crypto-assets ecosystem . ”
The Managing Director of the IMF concludes that by leveraging technology for the public good , the potential of crypto – assets can be harnessed to ensure that it can cease to be a heaven for illegal activities or money laundering .