In her speech at the Singapore Fintech Festival, Christine Lagarde, head of the International Monetary Fund, acknowledged that recent trends and the possibility of the global economy transitioning to digital assets can no longer be ignored, and issues of issuing central bank digital currencies (CBDCs) should be approached thoroughly.
On the one hand, Lagarde noted the desire of the main popular crypto assets, such as Bitcoin, Ethereum and XRP, for continuous improvement. On the other hand, it recognized that the risks of decentralized cryptocurrencies are still quite high and they cannot be considered as an alternative to CBDC. Therefore, the head of the IMF is not sure of the advisability of applying the concept on which existing cryptocurrencies are based.
The same point of view is presented in new IMF report. The Fund’s comparison of existing various forms of money showed that cryptocurrencies lose to everyone and cannot fully perform the functions of money. Despite global economic trends, this is still a risky direction. Digital currency undoubtedly has great prospects and potential, but at the same time it carries quite a lot of risks for the global financial ecosystem.
Nouriel Roubini, an economist who predicted the 2008 financial crisis, shares the same opinion. In his commentary on Lagarde's speech, he noted that the call to issue their own versions of digital money has nothing to do with the call to use existing cryptocurrencies or blockchain for CBDC. And so the euphoria of crypto enthusiasts is premature.
According to Roubini, there is no national bank, corporation or government agency that will host its balance sheet or ledger of customer transactions on a public, decentralized, peer-to-peer permissioned blockchain. He sees no compelling reason why such confidential and valuable information should be published.
Rubini noted that he was writing a separate article about this and the Central Bank’s digital currencies would have nothing to do with cryptocurrency and blockchain. They would simply expand central banks' balance sheets, enabling faster and more efficient payment systems.
You May Also Like
The Russian tax authorities are ready to take cryptocurrencies seriously
Mikhail Mishustin, head of the Federal Tax Service of Russia, believes that cryptocurrency makes it possible to evade taxes, cash out funds and deceive the state.
The Chamber of Commerce and Industry of Uzbekistan will resolve cryptocurrency disputes through arbitration
The Tashkent International Arbitration Center (TIAC) will be under the leadership of the Chamber of Commerce and Industry of Uzbekistan. According to the decree signed by President Shavkat Mirziyoyev, this platform will be used to resolve disagreements regarding investments, intellectual property and cryptocurrency technologies.
