IMF Chief Christine Lagarde asserted today central banks should consider the possibility of issuing digital currency Photocredit: Justin Chin/Bloomberg© 2018 BLOOMBERG FINANCE LP
Central banks should consider the possibility of issuing digital currency, International Monetary Fund Chair Christine Lagarde said today in a major address.
“That currency could satisfy public policy goals, such as financial inclusion, and security and consumer protection; and to provide what the private sector cannot: privacy in payments,” Lagarde asserted in prepared remarks to the Singapore Fintech Festival.
In addition, she said central bank digital currencies could improve financial stability by reducing the risk of bank runs. She noted with cash, people make runs on banks when they believe withdrawals are honored on a first-come-first-serve basis.
“Digital currency, instead, because it can be distributed much more easily than cash, could reassure even the person left lying on the couch!” Lagarde contended.
The IMF head added that in the fintech revolution, people expect money to be integrated with social media; readily available for online and person-to-person use (including for micro-payments); cheap and safe; and protected against criminals and prying eyes.
Countering opponents of central bank digital currencies, she argued technology offers a wide canvas to mitigate the potential risks to financial integrity and financial stability.
She added a public-private partnership would be the best way to foster central bank digital currency innovation.
“The central bank focuses on its comparative advantage back-end settlement—and financial institutions and start-ups are free to focus on what they do best—client interface and innovation. This is public-private partnership at its best,” said Lagarde.
The IMF leader said central bank digital currency offers great promise to increase financial inclusion in remote and marginalized regions of the world. “We know that banks are not exactly rushing to serve poor and rural populations,” she said pointedly.
Lagarde’s speech was accompanied by the release of a 39-page report by IMF staff on central bank digital currencies. To see the full white paper, go to https://bit.ly/2zcBrrY . Then click on “Free Full Text.”
I am bringing you perspectives on financial regulation from the rare vantage point of experience.
For nearly 20 years on the beat in Washington, I am capturing the flavor of developments at the alphabet soup agencies from SEC to CFTC to OCC to CFPB on issues from cybersecuri... MORE
Ted Knutson is one of the most experienced financial regulatory reporters in Washington. For years, he has covered the SEC, CFTC, the bank regulators and the key Congressional committees.
Central banks should consider the possibility of issuing digital currency, International Monetary Fund Chair Christine Lagarde said today in a major address.
“That currency could satisfy public policy goals, such as financial inclusion, and security and consumer protection; and to provide what the private sector cannot: privacy in payments,” Lagarde asserted in prepared remarks to the Singapore Fintech Festival.
In addition, she said central bank digital currencies could improve financial stability by reducing the risk of bank runs. She noted with cash, people make runs on banks when they believe withdrawals are honored on a first-come-first-serve basis.
“Digital currency, instead, because it can be distributed much more easily than cash, could reassure even the person left lying on the couch!” Lagarde contended.
The IMF head added that in the fintech revolution, people expect money to be integrated with social media; readily available for online and person-to-person use (including for micro-payments); cheap and safe; and protected against criminals and prying eyes.
Countering opponents of central bank digital currencies, she argued technology offers a wide canvas to mitigate the potential risks to financial integrity and financial stability.
She added a public-private partnership would be the best way to foster central bank digital currency innovation.
“The central bank focuses on its comparative advantage back-end settlement—and financial institutions and start-ups are free to focus on what they do best—client interface and innovation. This is public-private partnership at its best,” said Lagarde.
The IMF leader said central bank digital currency offers great promise to increase financial inclusion in remote and marginalized regions of the world. “We know that banks are not exactly rushing to serve poor and rural populations,” she said pointedly.
Lagarde’s speech was accompanied by the release of a 39-page report by IMF staff on central bank digital currencies. To see the full white paper, go to https://bit.ly/2zcBrrY . Then click on “Free Full Text.”
I am bringing you perspectives on financial regulation from the rare vantage point of experience.
For nearly 20 years on the beat in Washington, I am capturing the flavor of developments at the alphabet soup agencies from SEC to CFTC to OCC to CFPB on issues from cybersecuri... MORE
Ted Knutson is one of the most experienced financial regulatory reporters in Washington. For years, he has covered the SEC, CFTC, the bank regulators and the key Congressional committees.
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Francisco Gimeno - BC Analyst The IMF's leader has been defending digital currency innovation for a time now. This last declaration confirms even more how those committed to financial inclusion and real development see a digital economy being beneficial for everyone. Her words are very important and should be heard and debated by bankers all around the world.