Christine Lagarde, the Director of the International Monetary Fund (IMF) believes that the regulation of the cryptocurrency market should be developed using the same technology on which which the cryptocurrencies are based, i.e. to fight fire with fire.
Lagarde published a post on the IMF official blog recently called “Addressing the Dark Side of the Crypto World” in which she assures that implementing the blockchain technology along with the artificial intelligence, the cryptography and the biometric technology would make a promising approach for regulating the cryptocurrencies.
According to the Director of the IMF, the most important potential danger of the cryptocurrencies at the moment is that, thanks to their anonymity and decentralization, they are being used for money laundering and financing of terrorism, activities which the IMF is fighting against for the last 20 years. This is why Lagarde thinks it is necessary to manage the emerging threat that the cryptocurrencies represent.
Lagarde also said important efforts were being made at the moment by the regulatory authorities around the world to regulate the cryptocurrencies.
However, Lagarde is aware these policies are not sufficient and says they need to be polished, perfected and better implemented, all of which could be achieved with the blockchain technology to share information in real time and generate verified records client information records together with digital companies.
Besides fighting the illegal financing, the implementation of the blockchain technology with the goal of regulating the cryptocurrencies could also help the governments to reduce the tax evasion, including the tax evasion related to cross-border transactions.
On the other hand, Christine Lagarde thinks the international cooperation is key for preventing the illicit use of the cryptocurrencies. She pointed out the example of AlphaBay, a drug market that operated on the DarkNet until it was dismantled last July in a joint operation executed by Europol, the United States of America, Lithuania, Canada, the United Kingdom, Thailand and France.
The Director of the International Monetary Fund proposes to discuss a global regulatory frame during the next G20 meeting. This initiative was also proposed by France and backed up by Germany.
