Cryptocurrencies Require Regulation To Safeguard Financial Stability: IMF Chief
The head of the International Monetary Fund (IMF), Kristalina Georgieva, has called for the regulation of cryptocurrencies, citing potential risks to global financial stability.
Speaking at a digital currencies conference in Seoul, Georgieva expressed concerns that the widespread adoption of crypto assets could undermine macro-financial stability. She specifically highlighted the challenges that high crypto asset adoption might pose to traditional monetary policy, capital flow management measures, and fiscal sustainability.
Georgieva stressed on the need for rules to avoid the risks associated with cryptocurrencies while acknowledging the importance of maintaining an efficient, interoperable and accessible financial system. Contrary to stifling innovation, she argued that well-crafted regulations could spur and guide innovation in the rapidly evolving digital currency landscape.
During a panel discussion, Georgieva pointed out that policymakers had a choice: either actively participate in the development of digital money and contribute to its improvement or risk being left out of the process. She said that the goal of regulations was not to revert to a pre-crypto era but to harness the benefits of digital currencies while mitigating potential drawbacks.
The IMF chief highlighted the "tremendous interest" in learning from each other, particularly from emerging markets. She singled out India as a noteworthy example of digital public infrastructure. Georgieva also emphasised the value of learning from the experiences of advanced economies in their historical evolution of money.
