International Monetary Fund managing director Christine Lagarde shared her thoughts on the digital currency revolution during an address at the recent Bank of England conference in London. In her remarks, she noted that cryptocurrencies don’t presently represent a challenge to the status quo, but could do so in the future if new innovations help to resolve core problems like volatility, excessive energy requirements, and consumer risk. Lagarde also suggested that currencies like Bitcoin could eventually be a boon to the IMF’s own international reserve asset, the special drawing right (SDR).
The IMF head even went so far as to suggest that the rise of digital currencies could help the SDR compete against major currencies like the US Dollar and euro. According to a report from Reuters, she said that the idea of at least partially supplanting those global currencies is not just hypothetical:
“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.”
Overall, Lagarde seems to be optimistic about the potential benefits offered by digital currencies like Bitcoin. She said that those currencies could be superior to traditional cash, especially in countries with unstable economies – and even suggested that some digital currencies might eventually be added to the SDR - which currently includes the dollar, yen, yuan, pound sterling, and euro.