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Christine Lagarde, International Monetary Fund (IMF) Chief, believes in the benefits of blockchain technology, but says that the cryptocurrency market needs regulations. The information was released in a blog post titled: Addressing the Dark Side of the Crypto World.

Christine Lagarde: Cryptocurrencies Need Regulations

The post starts explaining that blockchain technology and cryptocurrencies could be used in many different cases.

“The technology behind these assets – including blockchain – is an exciting advancement that could help revolutionize fields beyond finance,” starts explaining the post. “It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.” 

But at the same time, the article moves very fast towards explaining the “peril of crypto-assets.” According to Lagarde, these cryptocurrencies are a vehicle for laundering money and financing terrorism activities. About that, Lagarde uses as an example AlphaBay, one of the most important online criminal marketplaces on the internet.

But the post does not finish there attacking cryptocurrencies. It says and explains that financial stability is another threat from cryptocurrencies.

The text reads as follows:

“Of course, money laundering and terrorist financing is only one dimension of the threat. Financial stability is another. The rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create new vulnerabilities. We need to develop regulatory frameworks to meet an evolving challenge. Many organizations have already started.”

In this way, Lagarde uses the negative aspects of the cryptocurrencies in order to propose regulations around the world. In the next days, there will be held an important G-20 meeting in Buenos Aires. The Finance Ministers from all over the world will discuss cryptocurrency regulations and how to tackle the activities around crypto-assets.

Proposed Regulations

The intention of Mrs Lagarde is to fight “fire with fire.” There are different use cases of blockchain technology and artificial intelligence and cryptography that would allow the market to be regulated.

Distributed ledger technology can be used in order to speed up information-sharing between regulators, and market participants. At the same time, the data can be transferred fast and smoothly between governments and other agencies.

With biometrics, artificial intelligence, and cryptography, it would be possible to enhance digital security and identify suspicious transactions in real time. That would help law enforcement agencies to act as fast as possible and stop illegal transactions.

The article finishes explaining that it is important to tackle the risks of cryptocurrencies, but allowing them to grow. The technology is promising and they can improve the financial system as a whole.

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Image Courtesy of Wikipedia and Altcointoday

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Regulations
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