IMF calls for crypto crackdown by fighting ‘fire with fire’
Christine Lagarde says governments can also use the technologies that drive crypto-currencies but to mitigate 'peril' and prevent illegal activities
Christine Lagarde has called for a crackdown on crypto-currencies, saying the anonymity of currencies such as Bitcoin means they are used by criminals and terrorists, but the same technology can also be used to “fight fire with fire,” reports the BBC.
The head of the International Monetary Fund, writing in a blog post entitled “Addressing the Dark Side of the Crypto World,” says “the same reason crypto-assets — or what some people call crypto-currencies — are so appealing is also what makes them dangerous.”
“These digital offerings are typically built in a decentralized way and without the need for a central bank… This gives crypto-asset transactions an element of anonymity, much like cash transactions. The result is a potentially major new vehicle for money laundering and the financing of terrorism.”
The IMF Director argues regulatory technology and supervisory technology could shut criminals out of the crypto world. While distributed ledger technology “can be used to speed up information-sharing between market participants and regulators” this same technology “that enables instant global transactions could be used to create registries of standard, verified, customer information along with digital signatures.”
Other technologies such as biometrics, artificial intelligence and cryptography could “enhance digital security and identify suspicious transactions in close to real time,” said Lagarde.
Regulators need to use the same rules “to protect consumers in both digital and non-digital transactions,” but she added that “no country can handle this challenge alone.”