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Lagardo: Central banks should consider cryptomania emissions

A digital name issued by a central bank can help increase financial inclusion and secure payments.

November 18, 2018 at 17:39 TASR

SINGAPORE. Central banks need to think about the problem of digital currencies, since we are at a time when money is changing, says Christine Lagarde, head of the International Monetary Fund (IMF).

Lagarda, on Wednesday (November 14), gave a speech at the Singapore Fintech Festival.

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Monetary volatility

She emphasized the unsustainable nature of money and indicated that the demand for cash throughout the world is now declining. According to him, central banks play the role of providing money to the digital economy.

See also: Monetary Fund Warns UK About Hard Brexitis

“I think they should consider issuing digital currency,” said Lagard.

A digital currency issued by a central bank can help increase financial inclusion and provide payments as a cheap and effective alternative to paper money.

Lagarde, however, also warned about the risks associated with cryptomus. "I just want to say that even if the arguments for supporting cryptomania are not universal, we should seriously consider them carefully and creatively."

The increase in cashless payments

Centralized banks around the world are studying how an increase in non-cash payments will affect their traditional role in pushing money and managing money supply.

Lagarda warned that the central banks of China, Canada, Sweden and Uruguay recorded this change and are trying to think about how to offer digital currency to the public.

See also: The head of the monetary fund urged leaders to fix global trading systems

For example, the central bank of Sweden (Riksbank) plans to launch an experimental version of the electronic currency e-kron in 2019.

Sweden is one of the countries where cash is used minimally. According to the latest survey, Riksbank uses only 13% of Swedes to buy in the store.

Deposits in commercial banks are already digital, but the crypts can also be covered by the government, as is currently in cash, Lagard said.

Digital currency can come in the form of government currencies or through an account held directly with the central bank.

Hidden as Bitcoin and others, by contrast, offer a decentralized alternative, that is, they are not controlled by any central authority.

Lagarde said that the crypt, confident in technology, did not fully convince her. “Proper regulation remains the basis of trust,” the head of the IMF believes.

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