“Work on the activities” How the IMF Chief Plans to Regulate Cryptocurrency

“Work on the activities” How the IMF Chief Plans to Regulate Cryptocurrency

The IMF is well aware of the crypto boom and the need from governments to regulate cryptocurrency. As so and within the CNN’s coverage of the World Government Summit in Dubai, John Defterios spoke with Christine Lagarde, the Managing Director of the International Monetary Fund.

In a complete interview they discussed key facts as they are the growth of global markets, America’s economic strategy and the rise and risks of cryptocurrency.

This is what Christine Lagarde thinks about cryptocurrencies and how governments are tackling the already maintstream:

On regulating cryptocurrency:

Answer:“I believe that it’s inevitable. We have had an entity based regulation over the past ten years, after the financial crisis we clearly have to move into an activity based regulation, forget about the entities, work on the activities themselves and who does what and who is licensed to do what and who is properly regulated and supervised.”

On Bitcoin, the mentality of global markets and starvation for high returns:

A:“It tells us a bit about the herd mentality, number one. It tells us a lot that people are looking for this high yield products and there is an element of speculation about that and it also tells us there is probably quite a bit of dark activities behind that particular scene and we are actively engaged in our anti-money laundering, in countering the financing of terrorism and that reinforces our determination to work on those, in those two directions.”

On how the U.S. 1.5 trillion dollar tax cut and spending package will drive up growth and inflation:

A: “We are certainly forecasting an increase of growth in the short term, this year, next year there will clearly be an impact on growth, if only because a lot of investment are going to be anticipated because of the full deduction of expenditure and then we will see how it goes. The risk of inflation would be linked to the fact that growth is being pushed, that salaries are higher because the US economy is working well and on many cylinders at the moment.”

On why the market was concerned about deflation and now overly concerned about inflation instead:

A: “People get used to things so quickly. deflation was the story of the day and there was not much movement. The fact that wages in the US went 0.2% higher then what they were expected, and everyone suddenly woke up and thought oh my goodness there is inflation on sight. Well everybody has been waiting for a little bit of inflation and a way to return to more traditional money policy, gradually, well communicated ahead of time and all the rest of it. So, our recommendation is hopefully that it continues to be that way.”