Christine Lagarde, head of the International Monetary Fund (IMF), praised Bitcoin in an official blog post and suggested that cryptocurrencies like it could have real global benefits.
Lagarde claims that not only could Bitcoin enable fast and inexpensive transactions, but the underlying technology behind cryptocurrencies, blockchain, could make financial markets safer.
She wrote, “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.”
The IMF boss calls for an even-handed approach which will both exploit the benefits of the new technology and minimize the risks in using and trading cryptocurrency. She added:
“Before crypto-assets can transform financial activity in a meaningful and lasting way, they must earn the confidence and support of consumers and authorities… an important initial step will be to reach a consensus within the global regulatory community on the role crypto-assets should play. Because crypto assets know no boundaries, international cooperation will be essential.”
She acknowledged the pitfalls associated with decentralized technology, such as the financing of terrorism and money laundering, describing them as “peril that comes along with the promise”.
Lagarde has been in favor of promoting a more global understanding of what cryptocurrency can do for the financial system but, like some governments around the world, promotes careful regulatory procedures. She argues that it is vital to distinguish between real threats and needless fears, saying that any regulatory procedure should be one that offers protection, but at the same time promotes innovation and enterprise.
Cryptocurrency markets have seen a recovery recently, although the reasons have been typically difficult to pinpoint. Some pundits even suggest this may have been caused by a statement by Islamic Scholar Mufti Muhammad Abu Bakar, declaring that cryptocurrencies can be ‘halal’ and therefore able to be traded by Muslims.
Lagarde’s comments will be seen as a positive note by those with a keen eye on Bitcoin’s current fortunes.