Should Banks and Governments Create their Own Cryptocurrencies? IMF’s Lagarde Thinks So

Should Banks and Governments Create their Own Cryptocurrencies? IMF's Lagarde Thinks So

In 2018 it seemed like everyone wanted to make their own cryptocurrency.  Sometimes tokenization made sense, but many companies looked as if they were forcing it.  Many cryptocurrency enthusiasts and even just onlookers with financial expertise have wondered if or when countries would finally start to issue their own coins.  

We have seen some countries experience economic disasters and a subsequent rush to the cryptocurrency space to escape from dying fiat values. In other countries, crypto has been used to circumvent sanctions and do business without being interrupted.  Venezuela went as far as creating the Petro, a cryptocurrency that is supposedly backed by their own oil supplies.

So far it seems only unsavory actors on the international stage are using cryptocurrency. Fraud and money laundering stemming from cryptocurrency businesses worry a lot of financial and national security leaders around the world, and some experts say that to ease these problems, we need to fight fire with fire.

Christine Lagarde is the head of the International Monetary Fund or IMF, and she thinks governments should think about issuing their own cryptocurrencies to stop bad actors and ensure a fair worldwide trading system.

Lagarde recently spoke at a conference in Singapore and stated that central banks all over the world could issue cryptocurrencies as a measure to fight crime.

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“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.”

Cryptocurrency enthusiasts may not exactly agree with her assessments.

“Putting it another way. The central bank focuses on its comparative advantage – back-end settlement – and financial institutions and start-ups are free to focus on what they do best – client interface and innovation. This is a public-private partnership at its best.”

While some argue that any type of exposure will aid in the mass adoption of cryptocurrencies.  Many crypto enthusiasts will turn their heads at any type of “central bank” cooperation or adoption.

Obviously, if a technology truly transcends borders and industries, then as many people as possible, with both good and bad intentions will attempt to harness its abilities.

Lagarde says moving towards a fully integrated crypto world will benefit everyone.

“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.”

According to The Guardian, Sweden, China, Canada, and Uruguay have all recently drawn up plans for issuing their own cryptocurrencies.