Disruptive technologies like Bitcoin and the economy
One of the top selections for the head of the European Central
Bank(ECB), Christine Lagarde has recently stated in an interview, her position on cryptocurrencies and the blockchain.
Christine Lagarde, currently, the managing director of the International Monetary Fund again indicates that she is in full support of blockchain and cryptocurrency companies, with a strong focus on Circle and Ripple.
She is set to be the first female European Central Bank president as was stated at the Paris Fintech Festival this year.
According to her, banks need to act and adopt new technologies like the blockchain in order to have any chance of keeping their customers comfortable.
Lagarde stated that:
“I think in the banking system at large in many, many countries, the difference will not be between those who are disrupted and those who survive. The difference will be between those who are cannibalised because they’re not seeing it coming, and they’re not embracing it, and those who self-induce that cannibalisation.”
She also stated that:
“And i’m using cannibalisation on purpose because it’s a bit of a striking, horrible word. But it’s really what it means. You’re going to disrupt your business model. You’re going to change it. You’re going to reduce your costs. You’re going to expedite your transactions, and you’re going to inspire confidence because you will build out on the basis of an existing backbone, which is your bank and the confidence, relationship you’ve established with your customers.”
This is where she can see a lot of changes. Taking a good look at Circle and Ripple, here is where they will be most active. Lagarde also warned that these cryptos will be some of the blockchain based currencies that will shake the system and they may require regulations in order to maintain stability in the financial industry.
The future of the European Central Bank
If Lagarde is selected she will be replacing Mario Draghi as the president of the ECB on November the 1st. The selected representative will be done by the 28 European Union member states and if Lagarde emerges victorious, she will be tasked with controlling inflation and enforcing monetary policies, along with decisions.
She further went on to say that:
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever.. that is clearly shaking the system. We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”
It is important to note that this is, not the first time Largade is sounding warning bells to banks regarding cryptocurrencies. In Davos back in 2018, she urged banks to start creating their own cryptocurrencies in order to keep up with the likes of Bitcoin and other cryptocurrencies.
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