Wednesday , June 16 2021

Lagarde calls on central banks to keep pace with the change and to issue digital currencies

New winds swell on the world's digitalizing economies, with the millennial generation reinventing how the economy works and holds their hands in their hands, said Christine Lagarde, IMF Managing Director.

"Money itself is changing and is likely to be more convenient and easy to use, and could be less serious," Lagarde said in a speech delivered Wednesday at the Singapore Financial Technology Festival.

He called "integrating money into social media so that it can be easily used on the Internet and in one person to another, which includes small payments that will be cheap and safe and protected from criminals and prying eyes."

Director of the International Monetary Fund (IMF) asked about the role of cash in this digital world, after the signs on the shop fronts began to say "no money is received" and deposits in banks began under pressure of new forms of money.

She pointed to new payment providers offered by electronic funds such as ALPAY, WeChat in China, PayTM in India and M-Pesa in Kenya, which offer money templates designed on the basis of the digital economy in response to what people demand and what the economy demands.

Even encrypted coins such as Batkin, Ross and Ripel compete for a place in the world without money, and they are constantly redesigning themselves to offer more stable value and faster and less expensive settlement, according to the IMF director.

Lagarde also called on central banks to issue digital currencies, and that countries need to fill the void that led to a gradual withdrawal of cash.

"E-mail providers see them as less risky than banks because they do not give money, deposit money in savings accounts, and make payments within their networks, while encrypted currencies seek to establish trust," she said. Technology. "

She noted that many central banks around the world are seriously considering the implementation of these ideas, including Canada, China, Sweden and Uruguay, where adoption of change and new thinking.

The first is financial inclusion, where the digital currency offers great potential through its ability to reach individuals and businesses in remote and marginal areas, while banks pay little attention to the service of the poor and those living in rural areas.

"The other advantage of digital currency is the security and protection of the consumer, without excessively excessive power in the hands of a number of large private entities that provide payment services, and ultimately monopolies are naturally controlled by payment services – cost-benefit."

The third goal is to maintain privacy, in liquid cash that allows cash without the client's knowledge, we use cash to protect our privacy for legitimate reasons, such as avoiding piracy or creating customer profiles, according to Lagarde.

However, Lagarde saw that "central banks are rushing to save the situation by reducing pure digital currency from the identity of the parties they engage in, because it will allow a richer mine for criminals."

"The risks involved in relying on digital currencies are not economic: central banks have a digital currency that verifies user identity and transaction records, but user identities are unknown to third parties or governments unless otherwise required by law." AML / CFT controls can operate in the background, And if there is suspicion of treatment, identity can be disclosed investigations carried out. "

"Digital currency can worsen the pressure on bank deposits, if digital currencies are like enough commercial bank deposits that are very safe, can be purchased indefinitely, value, and may even create interest – what is the need for a bank account in the source?", As she formulated the It.

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