Monday, October 2, 2017

IMF Chief sees cryptocurrencies as a viable alternative to using the dollar in failed monetary systems

In a rather curious outlook for nations experiencing problems with their own sovereign currencies, on Sept. 29 none other than the head of the IMF, Christine Lagarde, spoke to a group of central bankers in London advocating the creation and use of cryptocurrencies as an alternative to their using the dollar to stabilize failing economies.

A good recent example of this might be in the nation of Zimbabwe, who following the destruction of their own Zimbabwe dollar two decades ago took on the U.S. currency as their primary medium of exchange, only to later switch to the Yuan when it did not help on bringing the country out of massive hyperinflation.

International Monetary Fund (IMF) chief Christine Lagarde said that virtual currencies should not be dismissed outright by various governments around the world. She further claimed that the digital currencies could provide conventional government-issued tenders a “run for their money.” 
At a conference held in London, England, Lagarde said that different countries, particularly those with “weak institutions and unstable national currencies” may directly adopt a cryptocurrency. 
"Instead of adopting the currency of another country – such as the US dollar – some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0. So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy while being open to fresh ideas and new demands, as economies evolve." – Coin Telegraph
Unfortunately, Lagarde did not provide guidance on privately held cryptocurrency use within an economy, as the IMF has long held the belief that any forms of currency not controlled by a sovereign government or central bank have a place in the monetary system. 

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