The head of the International Monetary Fund, Christine Lagarde, believes blockchain is shaking up the banking space. Lagarde, referring to fintechs and blockchain projects as disruptors, said they are having a clear “impact on the incumbents.”
The influence can be seen in JPMorgan Chase’s venture into issuing its own stablecoin, Lagarde said. Similarly, Lagarde pointed to the European Central Bank’s TARGET Instant Payment Settlement (TIPS) project launched last autumn. TIPS allows European banks and individuals to transfer large sums of money at “virtually no cost.”
Christine Lagarde said:
“I think the role of the disruptors and anything that uses distributed ledger technology, whether you call it crypto assets, currencies or whatever, and it’s far from the Bitcoins we used to talk about a year ago, that is clearly shaking the system,”
However, Lagarde said she believes “We have to be mindful of two things: trust, and the stability of the system.” She went on to say blockchain and cryptocurrencies pose a threat to the traditional system in a sense they may shake it up too badly, destroying the needed stability in the process.
Talking of a Kenyan telecom company that has obtained a banking licence. Regulators are mindful that the competition is coming in a variety of guises including cryptocurrency exchanges.
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