IMF Head, Christine Lagarde: 'Banks Should Consider Launching Digital Currencies'

  • Christine Lagarde, the head of the International Monetary Fund (IMF), has said we should "consider the possibility of issuing digital currencies."
  • Lagarde noted that the case for digital currencies is not "universal", but we should "seriously" explore their potential use cases.

Christine Lagarde, a French lawyer and politician who is currently appointed as the managing director and chairwoman of the International Monetary Fund (IMF), has said “we should consider the possibility to issue digital currency.”

Lagarde’s comments regarding cryptocurrencies came as she delivered a speech at a conference in Singapore (on November 14th).

"Safe, Cheap, And Potentially Semi-Anonymous"

The former French minister of Economic Affairs noted that blockchain technology is “safe, cheap, and potentially semi-anonymous", and that central banks throughout the world should explore the use cases for their own cryptocurrencies.

Lagarde added that all countries can look into whether a state-issued digital currency would help in “supplying money to the digital economy.” She explained that digital money has the potential to promote economic and financial inclusion - as a large percentage of the world’s population still does not have access to modern banking services.

Lagarde also called on authorities worldwide to focus on developing infrastructure for a digital financial system, and create regulations to monitor cryptocurrency transactions.

Digital Currencies May Help Create A "More Level Playing Field"

She emphasized the importance of developing a regulatory framework for digital currencies as they will help ensure consumer protection and prevent them from being used to finance illicit activities.

Commenting on the benefits of using digital payments, Lagarde remarked:

The advantage is clear. Your payment would be immediate, safe, cheap, and potentially semi-anonymous. And central banks would retain a sure footing in payments. In addition, they would offer a more level playing field for competition, and a platform for innovation. Meanwhile, your bank or fellow entrepreneurs would have ensured a friendly user experience based on the latest technologies.

Christine Lagarde

Lagarde, who has been the chairwoman of the IMF since 2011, further noted that state-backed digital currencies would help prevent large payment technology firms from creating monopolies.

"Seriously, Carefully, Creatively" Exploring Digital Currencies

She also mentioned that "the more people you serve”, the more economical and practical it could become to use central bank digital currencies (CBDC). Moreover, she explained that we cannot fully rely on private firms when it comes to dealing with security issues related to conducting cross-border transactions.

According to Lagarde, private financial service providers “may under-invest in security to the extent they do not measure the full cost to society of a payment failure."

The IMF head also pointed out that the case for digital currencies “is not universal” and that their potential applications should be looked into “seriously, carefully, and creatively."

IOTA Partners with EVRYTHNG to Launch Distributed Ledger Tech-based IoT Applications

EVRYTHNG, an internet-of-things (IoT) platform that “activates every consumer product to make it intelligent, interactive and trackable,” has partnered with IOTA, a non-profit foundation which develops permissionless, distributed ledger technology (DLT)-based platforms.

The partnership between the two entities involves incorporating some of IOTA’s core technologies with EVRYTHNG’s Blockchain Integration Hub. After the integration of both technology platforms, consumer product brands will “have an easy way to rapidly test, scale and deploy IoT applications,” the announcement’s press release noted.

Established “Powerful Integrations” With Major Blockchain Networks

IoT applications deployed on the new platform will “deliver transparency and provenance to customers while sharing real-time data between supply chain partners,” the release stated.

Commenting on the initiative, Dominique Guinard, co-founder and Chief Technical Officer (CTO) at EVRYTHNG, remarked:

We are celebrating the one-year anniversary of our EVRYTHNG Blockchain Integration Hub. Over the past year, not only have we created powerful integrations with some of the most recognized blockchains in the world including, OriginTrail, Tierion, BLOCKv, Bitcoin and Ethereum but, we've launched real-world applications with the technology.

Guinard added: “This is why we are so excited to announce a strategic partnership with IOTA, a totally different kind of distributed ledger technology, specifically targeted at the IoT industry -- opening new opportunities for consumer product brands.”

Blockchain And IoT Projects To Attract Millions Of Dollars In Investments

“Big four” auditing and professional services firm Deloitte has estimated, through a sector-wide research study, that 42% of executives working in the manufacturing and consumer products sector intend to invest around $5 million in blockchain-related systems in the coming year. Deloitte’s report also mentioned that IoT applications will attract substantial investments which will mainly go towards funding the development of consumer protection and supply-chain management processes.

IOTA To Allow “Scalability, Interoperability, And Maturity” Of EVRYTHNG Platform

Although blockchain-enabled systems could potentially streamline many routine business processes, “industry first-movers must first overcome several challenges,” the release mentioned. For instance, there are “high costs associated with testing blockchain/DLT platforms to determine” which types of implementations will work best.

According to the release, IOTA was chosen as a platform to build on by EVRYTHNG’s developers because it potentially “brings a whole new dimension to the EVRYTHNG Blockchain Integration Hub.” The IOTA integration will “allow consumer product brands to experiment with emerging DLT capabilities while relying on the scalability, interoperability and maturity” of the EVRYTHNG platform.

Moreover, users will be able to “securely transfer data or payments without transaction fees in a trusted, permissionless, and decentralized environment.”

“Moving Beyond The Blockchain”

Holger Köther, the Director of Partnerships at the IOTA Foundation, stated:

IOTA’s distributed ledger technology moves beyond blockchain by enabling secure, feeless, data transfer and payments to advance IoT. Due to the nature of the supply chain and its lack of transparency and trust, IOTA’s Tangle technology is uniquely positioned to address these challenges. This partnership with EVRYTHNG clearly demonstrates how both consumer brands and their customers can benefit from greater transparency in the sourcing and manufacturing of consumer products.