Deputy Director of the Department of monetary and foreign exchange markets the International monetary Fund (IMF) believes that Central banks need to improve Fiat currency to keep at a distance any competition from cryptocurrencies.
This proposal was made in an article published Thursday and written by Dong Hae (Dong He). In this article, the beginning of which States that «cryptocurrency assets may one day reduce the demand for money the Central banks,» he argues that the Central Bank should consider a new concept for «prevention of possible competitive pressure on scriptaction Fiat currency».
This comment reflects previous comments Hae and other official representatives of the IMF on this issue. For example, Christine Lagarde, head of the Foundation, said
in March this year that «the same innovation that lie at the core of cryptocurrency assets will help us to regulate them – the wedge a wedge knock out».
In his article, Ho also notes that if scriptactive will get more widespread, it is likely that Central banks will lose the opportunity to influence the economy, including by changing interest rates. He also suggested that tighter regulation could be an incentive for Central banks.
«The government needs to regulate the use of scriptaction to prevent regulatory arbitrage, and any unfair competitive advantage scriptaction may result from weaker regulation,» he wrote. «This means the need for strict implementation of measures to prevent money laundering and financing of terrorism, strengthening the protection of consumers and the effective tax cryptocracy».
He also noted that Central banks can create their own digital assets, which can exchange in P2P mode.
«For example, Central Bank money could become more convenient for customers in the digital world, if the Central Bank will be releasing its own digital tokens that will complement the physical money and Bank reserves. This digital currency from the Central Bank could be exchanged in a P2P manner, as scriptactive», — stated in the article.
This idea is studied with varying degrees of success governments and regulators in many countries, and some even successfully make
it to life. However, not all Central banks consider issuing its own cryptocurrency a good idea. For example, this week the representative of the Central Bank of Hong Kong confirmed that the Bank has studied this issue and came to the conclusion that for this specific region such currency will benefit due to the high level of development of existing financial infrastructure.