Advancement of Bitcoin and other cryptocurrencies might make worldwide financial system safe in spite of ‘unavoidable’ accidents that might happen, said the International Monetary Fund’s Head.
As per Christine Lagarde, a few tools are built utilizing the Blockchain technology. Crypto assets have immense potential to transform the finance world highly and makes it cheaper, safer, and faster. She said, there are needless fears and real threats among them.
As central bankers and politicians gathered in Washington for spring meetings of IMF, she said that there is some hope for the world where businesses using cryptocurrencies might coexist along with traditional banks.
She said, this diversity level can build ‘financial ecosystem which is potentially more efficient and robust in battling threats.’
Plenty of people are using digital currencies as a substitute to the traditional way of holding money in the banks that are crashed during financial crisis in the year 2008. Though, most of the people lost money owing to the volatile price activities and post some digital exchanges hack.
Christine Lagarde has already issued notices over the dangers postured by Bitcoin and other cryptocurrencies, calling for worldwide regulators to phase a crackdown via utilizing the technology to "battle fire with fire".
A month ago, she said experts across the globe could bridle the cryptocurrencies’ potential in order to bring them down in control. Inability to do as such would permit the liberated development of "possibly major vehicle for tax evasion and terrorism financing," she included.
The Bank of England’s Governor, Mark Carney called Bitcoin and other virtual currencies "intrinsically dangerous" and also said that these cryptocurrencies have failed to successfully fulfill most fundamental capacity as cash. Bitcoin hit nearly $20,000 (£13,958) in price in the middle of December 2017, before smashing by the greater part prior this year.
However, ahead of forthcoming global financial stability report of IMF that looks after rising risks across the banking world, Lagarde said that there were a few positives of looking back again at cryptocurrencies. She said, “A reasonable approach might help us avoid pitfalls and harness gains.”
According to her, contrasting latest developments in comparison to 1990s’ advances, when a large number of high-tech organizations were begun just to fall a couple of years while the crash of dot-com. In addition, she said that most of the cryptocurrencies were unavoidable to fail. Over 1,600 virtual currencies are available for use, having expanded in number lately.
Though, only some technologies that rised while the era of dot-com have changed the world. Additionally, she said that digital currencies that survived ‘creative destruction’ process might have major impact on how to pay, invest, and save bills.