Deputy Director of the Department of the monetary markets and capital markets, IMF Dong Hae is confident that the Central banks have to offer the “best” exchange rates in order to prevent any potential competition with cryptocurrency.
This assumption was published Thursday in the article Dong Khe with the telling subtitle: “one day, crypto-assets can reduce the demand for Central Bank money”. There, the author argues that the Central banks will want to consider some of the concepts, to “prevent possible competitive pressures crypto-assets to Fiat money”.
However these statements are not new. The same thoughts, the representatives of the monetary Fund voiced before. So in March the Director of the IMF Christine Lagarde said that regulators must close the gaps in knowledge about cryptocurrency to fight them with their own weapons.
Also Dong Heng in his latest article argues that the Central Bank may lose its advantage to influence the economy through such tactics as changing interest rates, if cryptocurrencies become more widely distributed.
The Deputy Director suggested that the strengthening of control can serve as an impetus for banks.
“The government needs to regulate the use of crypto-assets to prevent regulatory arbitrage with any unfair competitive advantage that cryptocurrencies can obtain with weaker regulation,” he says. — “This means strict measures to prevent money laundering and financing of terrorism, strengthening the protection of consumers and the effective taxation of cryptocurrency transactions.”
Heng also said the idea of establishing banks of their own digital asset exchange which can be carried out in an ad-hoc form. As written in the article, they could make Central Bank money user-friendly in the digital world, releasing the tokens in addition to cash funds and Bank reserves.
This idea is already considering a number of banks, although opinions about its effectiveness vary. For example, the official representative of the Hong Kong monetary authority, performing the functions of the Central Bank, said that currently they are not planning to release a cryptocurrency, despite its research in this area.