Our Digital Future

From IMF Blog, May 30, 2018.

This article is brought to you in association with IMFBlog

Written by Camilla Lund Andersen

“Money makes the world go around,” Liza Minnelli famously sang in the movie Cabaret. Money has for centuries been central to human relationships. Loss of faith in its value can result in economic and political instability, even war. In the past few years, financial technology—fintech for short—has caught the world’s imagination by offering alternatives to traditional means of payment. Will digitalization redefine money? In this issue, we explore the possible consequences, good and bad.

Traditionally, money has always been an expression of sovereignty, writes Harold James of Princeton University—even if states at times failed spectacularly to guarantee its value. Today, most experts agree that so-called cryptocurrencies do not possess all the core attributes of money. But they also believe that distributed ledger technology, which underpins such assets, has the potential to transform payment services by removing the need for an intermediary. This would reduce the role of central banks and weaken state authority over the money supply. Indeed, that was the political motivation behind Bitcoin, the first decentralized digital currency.

Swedish central bank governor Stefan Ingves points out that, at present, only 13 percent of transactions in his country are settled with cash. If banknotes and coins have had their day, then soon the public will no longer have access to a state-guaranteed means of payment. That is, unless central banks redefine their role. One possibility would be for central banks to issue their own digital tokens—a solution that would require careful consideration of choices and policy trade-offs, says the IMF’s Dong He.

Worries about the misuse of financial technology should be weighed against its potential benefits to society. IMF Managing Director Christine Lagarde offers the following advice “Above all, we must keep an open mind about crypto assets and financial technology more broadly, not only because of the risks they pose, but also because of their potential to improve our lives.”

 

Camilla Lund Andersen is Editor-in-Chief of Finance & Development magazine and IMF News, which fall under her umbrella as chief of policy communications at the IMF

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

IMF: How can Eurozone avoid stagnation

Chauvinism and xenophobia will lead to global assertiveness and more wars

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

The EU threatens to occupy Libya militarily; is another colonial war brewing?

Earthquake: Monte Dei Paschi Di Siena

A Sting Exclusive: “Consumer expectations for the 2015 UN summit on climate change”, Director General of BEUC Monique Goyens outlines from Brussels

Young people demand a transparent job market: new campaign launches on international interns day

Here’s how China is going green

Has the treacherous theory about the ‘French patient’ finally prevailed?

EU Youth Conference concludes in Luxembourg with concrete plans on how to create real youth participation

Activist investors are more powerful than ever. Here’s what that means for the economy

Trump’s Russophiles under investigation, Europe remains ‘en garde’

Any doubt?

What if Trump wins the November election and Renzi loses the December referendum?

The Junior Enterprise concept: Business & Education

Clamp down on illegal trade in pets, urge Public Health Committee MEPs

MEPs Anti-fraud votes for more votes?

This plastic-free bag dissolves in water

EU: All economic indicators in free fall

EU and Amazon cut deal to end antitrust investigation over e-books deals

How bad could British healthcare get for its citizens abroad post-Brexit?

Could Rwanda become Africa’s healthcare leader?

Tourism offers much to the EU gets a little

COP21 Breaking News_08 December: Cities & Regions Launch Major Five-Year Vision to Take Action on Climate Change

Ebola in DR Congo: conflict zones could constitute ‘hiding places’ for the deadly virus – WHO chief

Syria: WHO appeals for funding to sustain critical health care for millions trapped by conflict

Gender equality and medicine in the 21st century

Large parts of the world are growing more fragile. Here are 5 steps to reverse course

Security Council extends mandate of UN Interim Force in Lebanon for a year

Data show EU Economy in a stubbornly subdued state

From cheeseburgers to coral reefs, the science of decision-making can change the world

Eurozone stagnates after exporting its recession to trading partners

Eurozone: Sovereign debt decreases for the first time since 2007

EU and Australia launch talks for a broad trade agreement

EU officially launches its first naval mission against migrant smugglers

EU: Turkey to shelter Syrian refugees and turn other immigrants back in return of €3 billion

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

Europe split in confronting the US sanctions on Iran, Washington isolated

Health Education, is it a necessity?

Lithuania should find its own way in the EU

European Youth Forum welcomes establishment of new Youth Intergroup in the European Parliament

‘Bleakest period yet’ in Occupied Palestinian Territory: UN human rights expert

Indoor air pollution is deadly. Here’s an unconventional solution

The vicious cycle of poverty and exclusion spreads fast engulfing more children

2013, a Political Odyssey: What future for Italy?

Azerbaijan chooses Greek corridor for its natural gas flow to EU

Bundestag kick starts the next episode of the Greek tragedy

Facebook and Google to treat Europe as the 51st State of the USA

4 innovation hotspots in the Arab world

Eurozone: The cycle of deficits, debts and austerity revisited

On Grexit: Incompetence just launched the historic Ultimatum that could open “pandora’s box”

GSMA Announces Latest Event Updates for 2018 “Mobile World Congress Americas, in Partnership with CTIA”

EP President praises Nobel Peace Prize award to Denis Mukwege and Nadia Murad

Greece leaves EU aid program, gets last 15 billion euro

3 reasons why AI won’t replace human translators… yet

Junior Enterprises as a solution for Youth Entrepreneurship

Parliament adopts its position on digital copyright rules

More than just a phone: mobile’s impact on sustainable development

Yes, together we can make a change! YO!Fest and EYE 2016

EU Facility for Refugees in Turkey: EUR 400 million Special Measure on education adopted

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s