The president of the International Monetary Fund (IMF) said that financial technologies such as digital currency are “inciting” the banking system and must be monitored to maintain stability.
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IMF Managing Director Christine Lagarde pointed out in an interview with CNBC on Wednesday that the business model of commercial banks is changing, which proves that innovations such as cryptocurrency are having a significant impact on existing companies in the financial industry .
"I think the vandals and anything that uses distributed ledger technology, whether you call it cryptographic assets, cryptocurrencies, or whatever… they obviously shake the whole system.
The head of the IMF warned that this change in the financial industry must be carried out under supervision .
“We don’t want innovation to have too much impact on the financial system and thus lose the necessary stability.”
Startups and large technology companies are paying more and more attention to the banking industry, as the timing of this multi-trillion dollar market is overturned. According to reports, Facebook is developing its own cryptocurrency. Last month, Apple partnered with Goldman Sachs to launch its own credit card.
Banking agencies have also responded by trying to embrace new technologies. JPMorgan is experimenting with a digital token called "JPM Coin," which immediately settles payments between customers, while Goldman Sachs is expanding its digital retail bank, Marcus, overseas.
Lagarde said that the "strong" entry of technology companies into the banking industry must be regulated .
"They have to take responsibility so that they can fully trust them."
Before Lagarde made the above remarks, the IMF Spring Meeting was held in Washington to discuss changes in global currency and payments.
Previously, she had encouraged central banks to study digital currencies to keep up with changes in the financial landscape. Many digital currencies like Bitcoin are “decentralized,” meaning they are not under the control of the central government.