Distributed Ledger Technologies Are Shaking the System – Lagarde
Managing director of International Monetary Fund (IMF), Christine Lagarde has said that blockchain innovators are shaking the traditional financial world.
Lagarde made her comments in an interview with CNBC on April 10th, following a panel devoted to “Money and Payments in the Digital Age,” as part of the 2019 Spring Meetings of the World Bank Group and the IMF in Washington, D.C.
Contributors to the panel, which Lagarde moderated, were co-founder and CEO of crypto finance firm Circle Jeremy Allaire, Sarah Youngwood, chief financial officer of Consumer & Community Banking at JPMorgan Chase, the European Central Bank’s (SCB) Benoît Cœuré, and governor of the Central Bank of Kenya (CBK) Patrick Njoroge.
Lagarde observed that financial disruptors are having a clear impact on incumbents and reshaping the system from the inside. She said:
“I think the role of the disruptors and anything that uses distributed ledger technology, whether you call it crypto assets, currencies or whatever — and it’s far from the Bitcoins we used to talk about a year ago — that is clearly shaking the system.”
She further noted that the transformative potential of blockchain-based technologies and assets have been hugely embraced by regulators and central banks.
Lagarde further stated:
“We have to be mindful of two things: trust, and the stability of the system […] we don’t want innovation that would shake the system so much that we would lose the stability that is needed.”
Lagarde has previously characterized crypto as being somewhere in between a fad and a revolution, and said that crypto markets must be regulated by the same laws that apply to the traditional sector in order to protect consumers and safeguard systemic stability.