Christine Lagarde: Bitcoin Must Be Globally Regulated
In her opinion, bitcoin has given people open doorways to numerous financial crimes such as money laundering. Thus, without global regulation in play, these doors can never be closed. She mentioned that bitcoin is not a currency. Instead, it is a rather “highly speculative asset which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”
One of the problems she has with bitcoin is that it is still so vulnerable to price swings. This is part of the reason as to why she claims it is not a valid currency. With bitcoin’s sudden spikes in recent months, the asset remains as volatile as ever. It just so happens that this volatility is potentially working for traders at the time of writing.
However, the currency is now trading about $5,000 less than its recent $40,000 all-time high. This is just under 20 percent less than where it was last week.
I think that there are criminal investigations that have taken place that I’m sure will continue to take place that demonstrate it very clearly. There has to be regulation, and this has to be applied and agreed upon at a global level because if there is an escape, that escape will be used.
Lagarde further mentions that full bitcoin regulation would not simply appear overnight. She says it would likely first be implemented at the G7 level. From there, it would move to G20 and then make its way into several other countries.
Regulation regarding bitcoin is something of a double-edge sword. On the one hand, it appears as though regulation is needed in one sense or another. The currency is expanding like there’s no tomorrow, and today, we are witnessing more and more that people will do just about anything to get their fingers on it. Cybercrime surrounding bitcoin and crypto has thus exploded in recent years.
At the same time, it can be argued that regulation completely goes against the very notions of cryptocurrency, which is initially built to be fully decentralized and placed in the hands of those who use it. Separate from fiat currencies, digital assets are not designed to be controlled by banks or standard financial institutions.
Regulation May Hurt BTC
Instead, they grow and change depending on how people use them. This is what gives bitcoin its power, and regulation could easily get in the way of this and turn it into just another currency.
Recently, the Federal Reserve proposed new rules that would require those taking part in crypto transactions worth more than $3,000 to divulge their identities. This has sparked arguments that user privacy is being put at stake.