Think About It
The head of one of the world's most influential financial organizations just threw her weight behind digital currencies.
Christine Lagarde is the head of the International Monetary Fund, an organization dedicated to ensuring the stability of the global economy. On Wednesday, she gave a speech at a financial tech conference in Singapore, where she suggested that governments take a good hard look at cryptocurrencies and other digital currencies.
"I believe we should consider the possibility to issue digital currency," Lagarde said. "There may be a role for the state to supply money to the digital economy."
More Pros Than Cons
During her speech, Lagarde argued that there are many potential benefits of a state-issued digital currency, which she believes could take the form of a "state-backed token, or perhaps an account held directly at the central bank."
"The advantage is clear," she told the audience. "Your payment would be immediate, safe, cheap, and potentially semi-anonymous... And central banks would retain a sure footing in payments."
Lagarde also announced the release of a new paper exploring the pros and cons of a state-issued digital currency on the IMF website.
A Turning Point
Digital currencies are still largely the domain of private actors — to date, only a handful of governments have even dabbled in the space, and those efforts have produced mixed results.
The IMF is a global finance leader — of the 195 countries in the world, 189 are members — so its head suggesting that governments consider issuing digital currencies carries great weight.
Ultimately, Lagarde's speech could prove to be a turning point in the adoption of digital currencies, moving the assets from the fringes of society into the financial mainstream.
READ MORE: IMF's Lagarde Says Central Banks Could Issue Digital Money [BBC]
More on cryptocurrencies: Federal Reserve Confirms US Central Bank Is Thinking About Their Own Digital Currency