Christine Lagarde, head of the International Monetary Fund (IMF) has warned central bankers not to underestimate digital currencies because they are gaining more adoption and traction.
Speaking at a conference hosted by the Bank of England in London, she said digital currencies might give existing currencies such as the dollar and euro “a run for their money.”
“If the two were to come together – the digital acceleration and facilitation, and the geopolitical situation – that would be propitious for relying on an alternative,” Lagarde said.
US dollars are used officially or unofficially as a currency in many countries with a history of economic instability, and Lagarde said digital currencies could become a better alternative to paper banknotes.
The IMF has previously said that digital currencies – the best known of which is Bitcoin – could play a greater role in future in cross-border transactions and in countries where the domestic currency is unstable.
However, she added that this will only become possible when certain technical problems have been solved because right now they are ‘too volatile, too risky, too energy intensive and because the underlying technologies are not yet scalable.’”
There are those who do not share this view on bitcoin and blockchain. People like Jamie Dimon and Jordan Belfort have recently called bitcoin a fraud while China recently banned ICOs and acted to ban some bitcoin exchanges.