Adding spark to the existing discussion on whether Bitcoins and cryptocurrencies are the right way to go forward, International Monetary Fund’s Director of Strategy, Policy and Review Department, Martin Muhleisen, has written a new piece, “The Future of Currency in a Digital World”.
Earlier in April, Christine Lagarde, Managing Director of IMF said that the cryptocurrency may cause a “large-scale shift away” from the government managed currency.
Muhleisen, in his article, suggests that the digital economy has the “power to continually transform itself, progressively branching out and boosting productivity across all sectors and industries. Such transformations are rare. Only three previous technologies earned this distinction: the steam engine, the electricity generator, and the printing press”.
Stating examples from the current trend, Muhleisen writes, “In the United Kingdom, Internet transactions already account for almost one-fifth of retail sales, excluding gasoline, up from just one-twentieth in 2008. And e-commerce sites are applying their data skills to finance. The Chinese e-commerce giant Alibaba already owns a bank and is using knowledge about its customers to provide small-scale loans to Chinese consumers. Amazon.com, the American e-commerce site, is moving in the same direction.”
Stating Bitcoin and cryptocurrencies as anonymous, he also suggests that its impact on laundering and crime is huge, which, according to studies, is not as big an issue.
Muhleisen also notes that “the underlying technology behind these currencies (blockchain) will likely revolutionize finance by making transactions faster and more secure, while better information on potential clients can improve the pricing of loans through better assessment of the likelihood of repayment.”