IMF Wants to Regulate Crypto Assets with Blockchain Technology

Mar 14, 2018 at 15:32

The International Monetary Fund (IMF) said that regulators may utilize blockchain or other distributed ledger technologies (DLT) to regulate Bitcoin and other cryptocurrencies to prevent its use for money laundering and other financial crimes.

“The same reason crypto-assets or what some people call cryptocurrencies are so appealing is also what makes them dangerous… These digital offerings are typically built in a decentralized way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions,” Christine Lagarde, the IMF’s managing director said in a blog post.

She noted that DLT and other digital technologies can be used by financial regulators across the globe to “communicate seamlessly” and create registries of customer information and digital signatures that would be linked to biometric information.

“Indeed, the same innovations that power crypto assets can also help us regulate them… To put it another way, we can fight fire with fire,” Lagarde stated.

Earlier, the official already mentioned the inevitability of slapping global regulations against cryptocurrencies as the technology is being associated with illicit activities.

“…It would not be wise to dismiss crypto assets; we must welcome their potential but also recognize their risks. By working together, and leveraging technology for the public good, we can harness the potential of crypto assets while ensuring that they never become a haven for illegal activity or a source of financial vulnerability,” she further expressed.

A growing number of regulators are also calling for international coordination on cryptocurrency regulation. This week, Japan announced that it will formally call for G20 members to discuss international cryptocurrency regulations at the group’s upcoming finance summit.