The head of the IMF has changed her mind about cryptocurrencies

The development of Bitcoin and other digital currencies could make the financial system safer, despite the risk of “inevitable crashes and accidents,” according to the head of the International Monetary Fund.

Christine Lagarde said the tools needed to make the technology behind Bitcoin work have the potential to revolutionize the world of finance. According to her, these tools can make the financial system faster, cheaper and safer. In the world of cryptocurrencies, she says, there are “both real threats and unfounded fears.”

After the IMF's regular spring meeting, where policymakers and central bankers met in Washington, she wrote a blog post noting that there was hope for a world where cryptocurrency firms could coexist with traditional banks. This dynamic, she said, could help create “a more efficient and more stable financial ecosystem.”

More and more consumers are using cryptocurrencies as an alternative to the old way of storing and transferring money, preferring them to traditional banks, whose collapse led to the financial crisis of 2008. Despite this, many investors have lost money due to the extreme volatility of digital currencies, and many due to hacker attacks on crypto exchanges. 

Previously Lagarde warned about the risks associated with Bitcoin and other cryptocurrencies, calling on world regulators to start using repressive technologies. Last month, she said that authorities in all countries should be wary of digital currencies and take control of them. Failure of authorities to implement these measures will result in the emergence of “potentially the largest vehicle for money laundering and terrorist financing.” 

Suddenly, the IMF chief’s rhetoric changed, leaving broad observers perplexed.

Mark Carney, governor of the Bank of England, called Bitcoin and other cryptocurrencies “inherently risky” and added that they are unable to fulfill their primary function as money. But ahead of the IMF's upcoming global financial stability report, which looks at emerging threats to the banking industry, Lagarde said people should take a fresh look at cryptocurrencies. “Having a clear view will help us avoid pitfalls and unlock the potential of cryptocurrencies.”.. 

Of the 1,600 tokens currently available, most cryptocurrencies are bound to fail, she said. But crypto assets that survive the process of “creative destruction” will have a huge impact on how we hold funds, where we invest and how we pay our bills.

According to https://www.theguardian.com