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12 Feb, 2018 09:29

Cryptocurrency regulation is ‘inevitable,’ says IMF boss Lagarde

Cryptocurrency regulation is ‘inevitable,’ says IMF boss Lagarde

It's only a matter of time before cryptocurrencies come under government regulation, according to the head of the International Monetary Fund (IMF) Christine Lagarde.

“It's inevitable,” she told CNNMoney, adding “It's clearly a domain where we need international regulation and proper supervision.” She also noted that “there is probably quite a bit of dark activity [in cryptocurrencies].”

The IMF is actively trying to prevent digital currencies from being used to launder money or finance terrorism, according to Lagarde. She said regulators need to focus less on entities, and more on activities - who is doing what, and whether they're properly licensed and supervised.

Lagarde’s words come as regulators and politicians across the world are clamping down on cryptocurrencies. Last week, French and German finance ministers said digital tokens “could pose substantial risks for investors” and potentially long-term financial stability. They called for greater protections for retail investors speculating in crypto.

Earlier, the head of the Bank for International Settlements (BIS) Agustin Carstens said bitcoin is “a combination of a bubble, a Ponzi scheme and an environmental disaster,” calling central banks to crack down on cryptocurrencies.

Virtual currency trading has already been banned in China, South Korea, and India. The US Securities and Exchange Commission and the Federal Bureau of Investigation started to crack down on alleged fraud in fundraising by some cryptocurrency companies and traders.

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