Christine Lagarde recommended that central banks develop their own virtual currencies.
“Change is the only constant,” wrote the ancient Greek philosopher Heraclitus of Ephesus. That was how the performance last week of Christine Lagarde, Managing Director of the International Monetary Fund (IMF), during the Fintech festival in Singapore. This introduction has helped raise what it represents to be a real change that comes in technological issues in the financial markets of the future: the adoption and massive use of cryptotermine.
“The wind is blowing, digitizing. In this new world, we are connected in any place and at any time. The world in which the millennia invent, in the hands of a cell phone, how our economy works. And this is the key: money itself is changing. We hope that it will become more practical and convenient to use, integrated with social networks, accessible for online use among people, including micropayments, ”the official added, who in a few days will be in Buenos Aires to participate in the G-20. .
In this panorama, where virtual currencies will occupy a much more significant place, the role of the state will not cease to be fundamental. To such an extent that for Lagarde, central banks must begin to re-examine their current restraint in relation to the type of financial asset that is gaining more and more space.
“Should central banks issue a new type of digital money? Token [unidad de valor, N.del R.] government-supported or perhaps an account opened directly with the central bank, available for individuals and companies to make retail payments? “- asked the head of the IMF during the conversation. According to his vision, it was possible to think about creating official crypto flows that can guarantee a high level of security and consumer protection, a very controversial aspect of our day.
In this sense, Lagarde noted that there already exist national monetary units that have begun to evaluate the benefits of running their virtual currencies. While China, Canada, Sweden and our brothers of Uruguay have already begun to think about what their cryptopors could be, the first to see their full potential was Mark Carney, Governor of the Bank of England (BoE).
Two years ago, Carney claimed that bitcoin was a “potential revolution” for which he launched an installation launcher on the blockchain, a technology that provides security for the most successful virtual currency. But this opinion is not openly shared by his colleagues, for whom bitcoin and other cryptographic threats may pose a threat to their current global monopoly on the monetary problem.
The question of the million that was made in recent years by the main central banks is to know what their role may be in the future if virtual currencies (issued outside of these institutions) have a privileged place on the stock exchanges between, inter alia, payment instrument, deposit or unit of account.
To remove all these doubts, Lagarde suggested that the central banks themselves take a step forward and enter the market in order to offer crypting currencies that enjoy prestige, seriousness and support that only national funds can offer. “I think we should consider the possibility of issuing digital currencies. Perhaps the state could provide money to the digital economy. This currency can meet public policy objectives, such as financial inclusion, security and consumer protection, and suggest that the private sector is unable to ensure: confidentiality of payments, ”he said in his speech. speech
For an official, crypto-terms and blockchain technology have four significant advantages. First, they are fast and cheap, usually due to low costs and short delivery times. In addition, DLT technology (“distributed accounting” technology) and intellectual contracts will effectively replace some intermediaries. On the other hand, virtual currencies allow you to store sensitive data very securely.
And they guarantee the rights of users thanks to transparent records.
This positive vision, conveyed by Lagard and the IMF, is confronted by analysts and experts who warn about the risks of investing in cryptoterms. Because no one avoids the high risk that today we live a speculative bubble in this market. Those who defend this view will remember that bitcoin multiplied its value by 100 in just two years.
And then its price fell by 50% in just a month.
According to the famous guru of Warren Buett, bitcoin is a “poison for rats” based on speculation. “Create a price increase and thereby create more customers. People like to speculate, they like to bet, ”he warned. In addition, to this huge volatility, we have to add a dispute about the environmental impact of the fact of “mountain” crypto-conversions: in the Morgan Stanley report, it is estimated that for each digital currency that is created, the average amount of energy is consumed. energy, which requires a house in the United States for two years.
Despite this, Lagard is optimistic: “The technology will change, and we must do it too. So we are not the last leaf on the dead branch, while others have already decided to fly with the wind. ”
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