{"id":26381,"date":"2017-10-02T10:08:25","date_gmt":"2017-10-02T15:08:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26381"},"modified":"2017-10-02T10:08:25","modified_gmt":"2017-10-02T15:08:25","slug":"imf-head-foresees-the-end-of-banking-and-the-triumph-of-cryptocurrency","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26381","title":{"rendered":"IMF Head Foresees the End of Banking and the Triumph of Cryptocurrency"},"content":{"rendered":"
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IMF Head Foresees the End of Banking and the Triumph of Cryptocurrency<\/a><\/h3>\n
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In a remarkably frank talk<\/a> at a Bank of England conference, the Managing Director of the International Monetary Fund has speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself. It could displace central\u00a0banks, conventional banking, and challenge the monopoly of national monies.<\/p>\n

Christine Lagarde<\/a>\u2013a Paris native who\u00a0has held her position at the IMF since 2011\u2013says the only substantial problems with existing cryptocurrency are fixable over time.<\/p>\n

In the long run, the technology itself can replace national monies, conventional financial intermediation, and even “puts a question mark on the fractional banking model we know today.”<\/p>\n

In a lecture that chastised her colleagues for failing to embrace the future, she warned that “Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.”<\/p>\n

Here are the relevant parts of her paper:<\/p>\n

Let us start with\u00a0virtual currencies<\/strong>. To be clear, this is not about digital payments in\u00a0existing<\/em>\u00a0currencies\u2014through Paypal and other \u201ce-money\u201d providers such as Alipay in China, or M-Pesa in Kenya.<\/p>\n

Virtual currencies are in a different category, because they provide their own unit of account and payment systems. These systems allow for peer-to-peer transactions\u00a0without<\/em>\u00a0central clearinghouses,\u00a0without<\/em>\u00a0central banks.<\/p>\n

For now, virtual currencies such as Bitcoin pose little or no challenge to the existing order of\u00a0fiat<\/em>\u00a0currencies and central banks. Why? Because they are too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable. Many are too opaque for regulators; and some have been hacked.<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

IMF Head Foresees the End of Banking and the Triumph of Cryptocurrency In a remarkably frank talk at a Bank of England conference, the Managing Director of the International Monetary Fund has speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself. It could displace central\u00a0banks, conventional banking, and challenge […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[61,4174,15611,14991,16261,418,434,16260],"class_list":["post-26381","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking","tag-bitcoin","tag-cryptocurrency","tag-foundation-for-economic-education","tag-fractional-banking","tag-imf","tag-international-monetary-fund","tag-jeffrey-a-tucker"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26381","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26381"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26381\/revisions"}],"predecessor-version":[{"id":26382,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26381\/revisions\/26382"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}