The head of the International Monetary Fund, Christine Lagarde, believes that regulators should use the blockchain system to cope with the "danger that comes with promises" associated with cryptocurrencies.
Lagarde argues that cryptocurrencies can cause financial instability, and also be used to finance terrorism and money laundering. The technology of the distributed registry and cryptos should be used by regulators at the world level, she believes.
In particular, distributed registry technology can be used to "accelerate the dissemination of information between market participants and regulators."
"Those who are interested in maintaining the security of online transactions need to have the means to communicate seamlessly. The technology that allows instant global transactions can be used to create standardized and verified customer data registers containing digital signatures." If governments learn to better manage data, it will help to free resources for fulfilling priority tasks and reduce the risks of avoiding paying taxes," Lagarde writes.
Lagarde stated the need to take action in response to existing risks, noting that the IMF can play a central role in this process.
"No country can cope with this threat alone," she said, "The IMF has a unique position as a forum for finding answers to questions about the crypto currency market."
Heads of central banks and financial departments of the G-20 states will discuss the regulation of the cryptocurrency market during the forthcoming meeting in Buenos Aires next week.
Lagarde's proposals for regulating the cryptocurrency market include consumer protection measures, the use of biometrics, cryptography and artificial intelligence tools to quickly identify suspicious transactions, and the introduction of uniform rules for the market in different countries.
The head of the IMF also noted that "rejecting crypto-currencies would not be wise." "We should welcome their potential, but be aware of the risks," she said.
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