In order to prevent the systems from becoming havens for fraudsters and money launderers, the countries should consider offering their own cryptocurrencies, says Christine Lagarde, head of the International Monetary Fund (IMF).
Referring to the emerging fintech industry, Lagarde added that it offers many opportunities as many consumers worry about using their bank accounts to buy goods and services due to privacy-related issues.
“The advantage is clear. Your payment would be immediate, safe, cheap, and potentially semi-anonymous. And central banks would retain a sure footing in payments. In addition, they would offer a more level playing field for competition, and a platform for innovation. Meanwhile, your bank or fellow entrepreneurs would have ensured a friendly user experience based on the latest technologies,” said Lagarade at the fintech conference in Singapore.
She added that central banks should seriously consider creating digital cash for the management of private financial transaction, or risk the establishment of privately-managed networks for the provision of such services. According to the IMF research, only central banks could develop a legitimate system of management of digital currencies, as such institutions only could prevent customers’ funds being stolen or misused.
“A new wind is blowing, that of digitalization. In this new world, we meet anywhere, anytime. The town square is back – virtually, on our smartphones. We exchange information, services, even emojis, instantly … peer to peer, person to person,” said Lagarde while emphasizing that “ …money itself is changing. We expect it to become more convenient and user-friendly, perhaps even less serious looking. We expect it to be integrated with social media, readily available for online and person-to-person use, including micropayments. And, of course, we expect it to be cheap and safe, protected against criminals and prying eyes,” concluded Lagarde.
Apparently, Sweden’s central bank has also done research in this area while IMF has applauded efforts of China, Canada, and Uruguay to move forward with plans to create a national digital currency.