Blockchain for Banking News

IMF Head tells public sector to buckle up for transition to digital currency

imf Kristalina Georgieva

During a digital currency event yesterday, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, called for a sense of urgency in the transition to digital currency. She was talking during a joint event organized by three Korean financial regulators and the IMF.

At the same event, former Governor of Sweden’s Riksbank, Stefan Ingves, observed that central banks and legacy banks have been too slow.  

“If you’re unable to engineer transaction efficiency, basically consumers and investors will use somebody else’s money. And then you are out of it and we cannot do monetary policy any more in the way we think about monetary policy,” he said.

“That’s why it’s so important not to be asleep at the wheel.”

The IMF’s Georgieva made similar observations. Her remarks at the close of a digital currency panel were, “Keep an open mind. Embrace opportunities. Manage the risks responsibly. Time is not our friend. We have to move fast. So my last word is buckle up.”

During her earlier speech she referred to crypto-assets as the Wild West, saying the sector doesn’t have a good reputation, and is not yet out of the woods. She reiterated the IMF’s concerns that crypto can be used to circumvent currency controls and tax collection.

MD Georgieva spoke more optimistically about tokenization. That includes the advantages of using blockchain for faster, lower risk settlement, transparency and fractionalization.

“The blockchains I just described will need to be cheap, stable, and trusted. They must ensure interoperability between assets and the contracts to trade them. They will require safe money that is also on chain—central bank digital currencies—to pay for assets,” she said.

Image Copyright: Bank of Korea