After detailing on the dark side of crypto-assets last month, International Monetary Fund Chief Christine Lagarde now has a set of praises for the role of cryptocurrencies in the financial market.
In her latest blog post on Monday, Lagarde says crypto-assets enable fast and inexpensive financial transactions, while offering some of the convenience of cash, making overseas transfers in a matter of hours, not days.
Cryptocurrency could have a significant impact on how we save, invest and pay our bills. However, it will not eliminate the need for trusted intermediaries, such as brokers and bankers.
She envisages a demand for central banks to provide digital forms of money which will not be risky and unstable as privately issued crypto-assets. She looks to raise this idea in the forthcoming Global Financial Stability Report.
Lagarde hopes that there will be a fine balance between centralized and de-centralized service providers as and when decentralized applications spurred by crypto-assets will lead to a diversification of the financial landscape.
"Moreover, banks and other financial institutions will face challenges to their business models, should there be a large-scale shift away from government-issued currencies toward crypto-assets. Regulators might find it harder to ensure the stability of a more diffuse and decentralized financial system," she wrote.
She also asked policymakers to keep an open mind and work toward an even-handed regulatory framework that protects against risks without discouraging innovation.
In last month's blog post, Lagarde had looked at the dark side of crypto-assets, including their potential use for money laundering and the financing of terrorism. She had urged authorities around the world to develop regulatory frameworks to meet the new vulnerabilities. She called to "fight fire with fire" while dealing with digital currencies.
The most important point she made in her latest blog was addressed to the global regulatory community asking them to reach a consensus among themselves as an initial step on the role crypto-assets should play. She added "crypto-assets know no boundaries, international cooperation will be essential."
This should earn the confidence and support of consumers and authorities before crypto-assets can transform financial activity in a meaningful and lasting way.
"We must act quickly to close the knowledge gaps that inhibit the effective monitoring of crypto-assets. There should be systemic risk assessment and timely policy responses, as well as measures to protect consumers, investors, and market integrity," she added.
Lagarde further said, "A clear-eyed approach can help us harness the gains and avoid the pitfalls of the new crypto-assets landscape."
She was also upbeat on the underlying technology of crypto-assets, distributed ledger technology or DLT, saying it could help financial markets function more efficiently.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.