The head of the International Monetary Fund (IMF), Kristalina Georgieva, emphasised the need for the regulation of cryptocurrencies due to potential risks to financial stability. Speaking at a conference in Seoul on digital currencies, Georgieva highlighted concerns that widespread adoption of crypto assets could undermine macro-financial stability.
In her opening speech, Georgieva pointed out that the significant adoption of crypto assets could impact the effectiveness of monetary policy, the management of capital flows, and fiscal sustainability, particularly in terms of tax collection affected by the volatility of cryptocurrencies.
The IMF’s managing director stressed the importance of implementing rules to mitigate the risks associated with crypto assets while also acknowledging the need to leverage the technologies of cryptocurrencies to build a more efficient, interoperable, and accessible financial system.
Georgieva clarified that the objective is not to revert to a pre-crypto era or stifle innovation. Instead, she advocated for well-crafted rules that can encourage and guide innovation. During a panel discussion, she expressed that policymakers have the choice to be part of the development of digital money and contribute to making it better or risk being left out.
Highlighting the interest in learning from various regions, Georgieva mentioned the “tremendous interest” in understanding developments in emerging markets, with a specific reference to India and its digital public infrastructure. She also emphasised the value of learning from the experience of advanced economies in the historical evolution of money.
