With so many global attempts to regulate cryptocurrency, it seems fair to assume that someone, somewhere will eventually get their way, and according to International Monetary Fund chief Christine Lagarde, that time may be arriving sooner than we think.
Christine Lagarde, head of the International Monetary Fund, has stated that international regulatory action on cryptocurrencies is “inevitable.”
Lagarde, who is the managing director of the international organization that aims to foster global financial stability, said that the IMF’s concerns over cryptocurrencies stem largely from their potential use in illicit financial activities.
In an interview with CNNMoney on Feb. 11, she said:
“We are actively engaging in anti-money laundering and countering the financing of terrorism. And that reinforces our determination to work on those two directions.”
Lagarde further explained that the regulatory direction should be activity-based, focusing on “who is doing what, and whether they’re properly licensed and supervised.”
It has been clear that regulation may potentially be unavoidable, and Lagarde seemed to confirm this. She said that as the cryptocurrency market continues to grow, government officials can’t help but pay closer attention. While they can’t stop traders from getting involved, they can warn newcomers about potential scams and take what she calls necessary action to prevent missteps and future fraud. As Bloomberg reported:
“We need to move to regulations of activities, not entities, because it’s not going to be about the banks, and it’s not going to be about the insurance,” she stated. “We have to anticipate where the next crisis will come from. Will it be the shadow banking? Will it be cryptocurrencies rising to the sky? Asset prices have gone up massively; durably, and we all agreed, at that time, that there had to be a market correction.”
During the Davos World Economic Forum in late January, several worldwide leaders shared the same sentiment, including the U.K. Prime Minister Theresa May, French President Emmanuel Macron and the secretary of the U.S. Treasury Department Steven Mnuchin.
Mnuchin explained during the conference, “We encourage fintech, we encourage innovation, but we want to make sure that all of our financial markets are safe and aren’t being used for illicit activities.”
Just last week, senior officials from France and Germany called for the G20 group of nations to discuss cooperative action on cryptocurrencies ahead of a summit next month.