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Christine Lagarde has laid out plans for the world to harness the potential of to help reign them in and control them.

She said the technology behind bitcoin such as blockchain is an advancement which could revolutionise financial services.

Cryptocurrencies have been praised as a way to speed up financial transactions as well as reducing the cost, however the anonymity behind the technology has sparked concern amid fears of cyber crime and terrorists using cryptocurrencies.

Ms Lagarde saud what makes the technology so appealing is also what makes it dangerous, as now it can be used as a “major new vehicle for money laundering and the financing of terrorism”.

She said: “The same innovations that power crypto-assets can also help us regulate them. To put it another way, we can fight fire with fire. Regulatory technology and supervisory technology can help shut criminals out of the crypto world.”

She also highlighted the distributed ledger technology (DLT) used in cryptocurrencies can be helpful. The UK government defines DLT as “an asset database that can be shared across a network of multiple sites, geographies or institutions.”

Ms Lagarde said: “The technology that enables instant global transactions could be used to create registries of standard, verified, customer information along with digital signatures.”

She believes DLT technology can “speed-up information sharing between market participants and regulators.”

Crypto UK, an industry body said that regulation is “essential to attracting the best of this sector to call the UK home.”

Last month Ms Lagarde said it is only a matter of time before cryptocurrencies are regulated by the government.

Ms Lagarde said government regulation of cryptocurrencies is “inevitable” as world leaders scrutinise digital currencies.

She said the IMF is doing its best to stop the use of cryptocurrencies from being used to launder money or finance terrorism while governments and central banks are starting to pay close attention to cryptocurrencies due to the possibilities of scams.

(Excerpt) Read more Here | 2018-03-13 19:17:55


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