Christine Lagarde, the head of IMF has suggested that regulators should use blockchain to curb fraudulent activities related to cryptocurrencies.
“The power that drives cryptocurrency assets can be used to regulate them as well. We can use fire to fight fire,” said Lagarde in a blog post on the IMF website.
Lagarde said that cryptocurrency assets might create financial instability and facilitate things like money laundering, and, terrorism. She argued that the cryptography and ledger tech should be used to coordinate regulatory efforts internationally.
In her words:
“The distributed ledger tech can be employed to speed up the information sharing process between regulators and market participants.”
“Individual’s and organizations with shared interests in keeping the online marketplace safe should be able to communicate seamlessly. The technology in question should allow instant global transactions that can be used to verify customer information making provision for digital signatures, and, create registries of standard. The government can free up resources by making more efficient use of data using blockchain technology. The technology can also be used to check tax evasion in cross-border transactions.”
She said that cryptography, biometrics, and, AI could be combined and used to free the cryptocurrency ecosystem of pollution. They can be used to point out suspicious transactions and enhance digital security. This will empower the law enforcement agencies in stopping illegal transactions.
Her views are in line with her previous comments on cryptocurrencies and blockchain technology. Although there are no official comments yet, her firm stances may be an indication that the IMF is making plans to intervene in the cryptocurrency industry soon.
How an intervention by the IMF will affect the cryptocurrency industry is not yet clear. Until more research is done, and the IMF makes a move in the industry, no one can be sure of the influence it will have.