Cryptocurrencies are “clearly shaking the system” according to the Managing Director of the International Monetary Fund (IMF) Christine Lagarde.
The IMF chief’s words followed a panel at the IMF Spring Meetings in which she called for financial regulation to move forward with fintech innovation.
If you really wanted stability you would have stayed on gold.
You chose an instable and "shaking" system when you made the catastrophic engineering decision to build a global financial system on government shitcoins! pic.twitter.com/Lft5W0ikgg
— Saifedean Ammous (@saifedean) April 11, 2019
Regulation needed to protect the system from crypto
Lagarde spoke about a need for regulation to actually have a purpose to protect the incumbent legacy system from the decentralised threat of crypto.
She said: “I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever… that is clearly shaking the system.”
The technology is already being used or trialled by some of the world’s largest companies. Facebook is reportedly trying to raise $1bn to start its own cryptocurrency for use on WhatsApp, and JP Morgan is set to launch a coin to accelerate transactions between its own clients.
Legacy markets losing stability
Largarde highlighted that regulation must accompany such technological advances since too much innovation could “shake the system so much that we would lose the stability”.
However, Bitcoin advocate and author of ‘The Bitcoin Standard: The Decentralized Alternative to Central Banking’, Saifedean Ammous, spoke out against the IMF chief for the hypocrisy of arguing a system based on soft fiat money was more stable than one based on truly sound money.
Lagarde also warned of technology companies entering the finance sector and that they should be subject to regulation or else “they will have to be held accountable so that they can be fully trusted”.
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