Lagarde of IMF has decided to crack down on Bitcoin and its transaction by employing the very technology that powers the virtual currency. She says that it is essential to bring the transaction of cryptocurrency under strict control through the cooperation of international finance authorities. Lagarde views cryptocurrency as a medium of financial scams and even as a sponsor of terrorism.
It is her observation that the same technology that drives crypto currency can be employed to regulate it. The latency of the digital currency needs to harness to ensure that it does not turn into a source of illegal activities and fiscal vulnerabilities.
The distributed technology of ledger keeping enables the verification of crypto currency transactions without any need of a centralized authority to register the transaction. This technique is employed to quicken the speed of sharing information and statistics among regulators that will improve the supervision of the financial integrity of the environment. Such and more technological advancements, including the Blockchain technology, has revolutionized the financial system by making provision of payment methods at low costs for people who do not have a bank account to their name. But the promises come with impending perils, as Lagarde warned. Despite the fact, that supporters of Bitcoin have said that technology has made the method of payment cheaper and more flexible, but Lagarde and several other economists are still very apprehensive and firm on the statement that the virtual currency represents a risky abstract bubble. With it rapid price growth and erratic price plunges, Bitcoin is synonymous with ruin and bankruptcy. What had once been 20000 dollars has crashed below 9300 dollars earlier on Tuesday during the trade.
Lagarde has asked every investor to be well acquainted with the risk of trading in Bitcoin, in spite of the promising potential of its technology. The Bank of England’s governor has praised the potential of the technology but has cracked down on the virtual currency itself saying that it is anything but actual money. The Bank is going to report to G20 about tightened control and how it intends to implement the technology in its own system of payment.
The regulatory controls of China, South Korea, and Russia have triggered dramatic price plunges. Lagarde is seeking multinational cooperation for effective regulation of the global crypto currencies, that will resemble the shutting down of AlphaBay through international collaboration.