During her speech at Singapore Fintech Festival 2018, Christine Largarde, IMF’s Managing Director expressed the need for states to consider the possibility to issue digital currency, adding that there may be a role for the state to supply money to the digital economy.
Ms Lagarde is of the opinion that a central bank backed cryptocurrency could achieve the following goals financial inclusion, security and consumer protection; and to provide what the private sector cannot — privacy in payments.
How a central bank backed cryptocurrency could aid financial inclusion
She shared during her speech that cryptocurrencies offer great promise through its through its ability to reach people and businesses in remote and marginalized regions where banks are not exactly rushing to serve poor and rural populations.
Ms Largarde further added that it is critical because cash might no longer be an option, if the majority of people adopt digital forms of money, the infrastructure for cash would degrade, leaving those in the periphery behind.
She emphasized of course, cryptocurrency is not necessarily the only answer. There may be scope for governments to encourage private sector solutions, by providing funding, or improving infrastructure.