The Official Monetary and Financial Institutions Forum (OMFIF) has just released their latest bulletin.
Included in the 30-page bulletin is an article covering fintech, written by Christine Lagarde, head of the International Monetary Fund (IMF), a global organization focused on bringing economic health and security to people around the world.
The article, entitled “A Regulatory Approach to Fintech: Guarding Against Emerging Risks Without Stifling Innovation,” touches on the pros, cons and challenges surrounding the adoption of cryptocurrencies.
Here’s a look at some of the highlights.
Crypto Assets Should Not Be Dismissed
“Today, some enthusiasts say crypto-assets may represent the beginning of a similar breakthrough. Others condemn crypto-assets as little more than a fad or a fraud. We should not dismiss them so lightly.”
Fintech Is Both Risky and Promising
“Financial technology offers considerable promise, but it also poses risks. Consider distributed ledger technology, which underpins crypto-assets. It can enable faster and cheaper transactions, store records securely and execute so-called smart contracts automatically. But the technology has also been used for illicit purposes.”
Regulation vs. Freedom of Innovation
“Regulators face a difficult task. On the one hand, they must protect consumers and investors against fraud and combat tax evasion, money laundering and the financing of terrorism. They must also protect the integrity and stability of the financial system. On the other, they must beware of stifling innovation that benefits the public. By engaging with market participants at the centre of financial innovation, regulators can stay abreast of the benefits of new technologies and identify risk. Developing a forward-looking regulatory framework calls for creativity, flexibility, and new expertise….”