US monitoring rise of cryptocurrencies as IMF seeks need for regulations

December 02
09:16 2017

Amidst bitcoin crossing the $ 10,000 mark in recent days, the White House on Friday said it is monitoring the development while the International Monetary Fund underscored the need for regulations of cryptocurrencies.

Being billed as an alternate digital currency, cryptocurrency is a medium of exchange using cryptography to secure the transactions and to control the creation of new units.

Bitcoin, the first of these cryptocurrencies, over the Thanksgiving weekend has seen a major surge with a single unit being traded at more than $ 10,000.

“I know this is something that is being monitored by our team here,” White House Press Secretary Sarah Sanders told reporters at her daily news conference.

The IMF spokesman Gerry Rice said cryptocurrencies, including ICOs; including the initial claim offerings, should be subject to appropriate regulation and supervision.

“A key challenge for country authorities will be to contain risks without stifling the innovation associated with cryptocurrencies,” he told reporters in response to a question.

“We also believe that greater international discussion and, indeed, cooperation would be helpful, and as you may have noted, we, the IMF, have been trying to play a role in that regard,” he said.

Cryptocurrencies and their underlying technologies can have potential benefits, including the promotion of financial inclusion and more efficient payment and settlement processes, he said.

Investors in the US and globally have been investing massively in cryptocurrencies, bitcoin in particular.

“On the other hand, we have also alerted for, cautioned, that cryptocurrencies can also pose considerable risks as potential vehicles for such things as money laundering, terrorist financing, tax evasion and so on. So there’s a need for a balanced assessment of cryptocurrencies,” Rice said.

The White House said the development on the bitcoin front is being monitored by its homeland security team.

“I know it’s something that he’s keeping an eye on.And we’ll keep you posted when we have anything further on it,” Sanders said.

Andal K Quarles, member, Board of Governors of the Federal Reserve System, in his address to the Fintech Conference said that the financial industry is increasingly recognizing that it should separate the concept of digital currencies from the innovative new technologies that they have employed to transfer assets.

“As part of the new technology associated with fintech, we are now seeing the emergence of privately developed digital currencies using new decentralized technologies,” Quarles said.

Jerome H Powell, Federal Reserve Board chairman nominee said that they are paying close attention to it.

“From our standpoint, cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy, something we pay close attention to,” he told lawmakers during his confirmation hearing this week.

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