The price of bitcoin saw a boost in value, which coincided with remarks from the chief of the International Monetary Fund (IMF) after she wrote about the benefits the industry can have on the traditional finance system.
In a blog published yesterday, Christine Lagarde, the head of the IMF, wrote that cryptocurrencies enable fast and inexpensive financial transactions, adding that:[1]
“The underlying technology of crypto-assets – distributed ledger technology, or DLT – could help financial markets function more efficiently.”
Following her comments, the price of bitcoin rose above $8,000 again after a tough start to the second quarter. She went on to say that:
“Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto-assets that survive could have a significant impact on how we save, invest, and pay our bills.”
She added that it was important for policymakers to keep an open mind when considering an even-handed regulatory framework that not only reduces the risks involved but ensures that the nascent sector can continue to grow.
While Lagarde is of the opinion that the tools used with bitcoin and other digital currencies could improve the financial system, she doesn’t think the fintech revolution will eliminate the need for trusted intermediaries such as banks or brokers.
“There is hope, however, that decentralised applications spurred by crypto-assets will lead to a diversification of the financial landscape, a better balance between centralised and decentralised service providers, and a financial ecosystem that is more efficient and potentially more robust in resisting threats,” she said.
Notably, she went on to say that in order for cryptocurrencies to transform the finance system, they must first earn the confidence and support of consumers and authorities.
