- IMF Managing Director supports further regulation of crypto, citing risks to financial stability in comments made at the institution’s recent event.
- At the same event, R3 founder claims blockchain not necessary for digital money, and that cryptocurrencies shouldn’t be viewed as assets.
Speaking on Thursday at the International Monetary Fund (IMF) International Conference on Digital Money in Seoul, the managing director of the IMF, Kristalina Georgieva, stressed the need for cryptocurrencies to be regulated in order to protect global financial stability.
According to a report from Reuters, Georgieva’s main concern was that as adoption of crypto increases so too will the volatility of tax collection, which she says may have flow on effects for monetary policy and fiscal sustainability.
Regulation Not Meant to Destroy Crypto
Georgieva made clear she doesn’t see regulation’s purpose to be to prevent broader adoption of crypto or stifle innovation. Rather, she believes regulation can allow the industry to grow while minimising risks to the broader economy:
The challenge is that high crypto asset adoption could undermine macro-financial stability…Our goal is to make a more efficient, interoperable and accessible financial system by providing rules to avoid the risks of crypto, and infrastructure by leveraging some of its technologies.
Kristalina Georgieva, IMF Managing DirectorGeorgieva went on to say that digital money is coming whether policy makers are a part of it or not and they currently have an opportunity to actively guide its development.
She said the goal of regulation should not be to “return us to a pre-crypto world, nor to squash innovation”, insisting that “good rules can spur and guide innovation.”
R3 Founder Questions Necessity of Blockchain, Says Crypto Not An Asset
Speaking at the same conference, the founder and CEO of distributed finance firm R3, David Rutter, said he wasn’t “sure blockchain is essential for digital money.”
Rutter explained his stance, saying that he believes blockchain is “inefficient for regulated finance — so we’re not going to actually have blockchains underpinning our financial infrastructure.”
He believes governments give cryptocurrencies more credibility than they deserve by calling them ‘assets’, and that the vast majority of them are essentially scams:
The public sector gives maybe more credence to crypto than I ever would by talking about it as an asset, when fundamentally it’s not. The vast majority, almost all crypto coins that have been issued, have been fundamentally about issuing a whitepaper and founders taking money off of the table. We’ve had, we’ve heard many speakers today, talk about the nefarious usage of crypto — calling them assets is concerning.
David Rutter, Founder and CEO of R3Despite his seemingly overwhelmingly negative attitude to crypto, Rutter does believe the technology has a lot of potential, but thinks the crypto and broader finance communities need to be mindful of the risks the technology presents:
We can see clear paths to improve international payments, domestic payments, purpose bound money for social good, there’s a lot of good stuff that could come out of this. But, as a community we have to be very aware of the dark side and I think those things can be addressed more forcefully.
David Rutter, Founder and CEO of R3Credit: Source link
