Christine Lagarde, who has been nominated by European governments to replace sitting European Central Bank President Mario Draghi, appears kinder to the burgeoning cryptocurrency industry than her predecessor.
In a statement issued to the Economic and Monetary Affairs Committee of the European Parliament, the former managing director of the International Monetary Fund laid out her guiding philosophy and game plan for how she will govern if her nomination is ratified.
In the speech, the EU Central Bank’s nominee briefly touched on the topic of innovative technologies, including cryptocurrency. And her touch was gentler than most.
“In this environment, central banks and supervisors need to ensure the safety of the financial sector, but also to be open to the opportunities provided by change,” Lagarde’s statement reads. “In the case of new technologies — including digital currencies — that means being alert to risks in terms of financial stability, privacy or criminal activities, and ensuring appropriate regulation is in place to steer technology towards the public good. But it also means recognising the wider social benefits from innovation and allowing them space to develop.”
Along with championing the social benefits of bitcoin and the like, her stated approach appears to veer toward cooperation with cryptocurrency companies, a friendlier stance compared to that of many of her peers in the EU and abroad. It’s certainly a stark pivot from the current European Central Bank president’s own.
“At this point in time, [cryptocurrencies] are not significant enough in their entity that they could affect our economies in a macro way,” Draghi said in a Q&A this year.
Lagarde thinks differently. In an interview with CNBC, she acknowledged that bitcoin and its cohorts have already begun to disrupt the legacy financial system.
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system,” she said. “We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”
Mati Greenspan, a senior analyst at eToro, wrote in an email blast to clients that Lagarde “is incredibly crypto friendly” and that her appointment as the EU Central Bank’s head should be welcomed news to the industry.
At the very least, Lagarde recognizes that Bitcoin is not a technology to be ignored, but one to be fostered. This comes at a time when governments around the world are waking up to the potential of Bitcoin, and as some organizations, like the G7’s Financial Action Task Force, are recommending stringent regulations to keep it and its users in check.
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