July 19, 2019 | 5:54 AM IST
banking

Cryptocurrencies are destabilising global banking sector: IMF

Expressing concern over the growing intervention of crypto currencies in the banking sector, International Monetary Fund Managing Director Christine Lagarde said that it is shaking the sector across the globe.

She said that digital money has an adverse impact on the global finances and the outcomes must essentially be monitored to prevent destabilisation, mitigate risks and even reduce the demand for central bank money, says a report.

Earlier this year the IMF said that virtual currencies cannot be regarded as real money, while Christine Lagarde praised blockchain technology for being “safe, cheap, and potentially semi-anonymous”.

If cryptocurrency is to grow then certain measures will have to implemented to prevent consumers from being exposed to much risk, whether that be such incidents as that of QuadrigaCX, a hack like that of Cryptopia, or the volatility that market is still subject to. It is not that IMF is against crypto or virtual currencies, but has even used an image of Bitcoin on its website to illustrate the “next evolution of money”. Still it believes that cryptocurrencies have to clear many more hurdles before being adopted as a standard mode of payment.

The crypto currencies and blockchain technology has been growing rapidly in the past few years and with companies like JPMorgan Chase which has JPM Coin. Meanwhile the World Economic Forum (WEF) has also released a report showing over 40 central banks of the world are conducting extensive research and running pilot programmes relating to the space.

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