IMF chief says Europe can avoid debt crisis, hard to think of Bitcoin as money
Reuters
Published Oct 05, 2021 11:18AM ET
WASHINGTON (Reuters) - Medium-term fiscal consolidation and growth will put Europe on a sound footing to avoid another sovereign debt crisis despite rising debt levels caused by the COVID-19 pandemic, the head of the International Monetary Fund said on Tuesday.
Managing Director Kristalina Georgieva, speaking remotely to an event hosted by Bocconi University in Italy, said she regards digital currencies backed by central banks to be the most reliable form of digital money and that it is difficult to think of Bitcoin and other crypto assets as money.
Georgieva said that Europe was more fit to avoid another debt crisis such as the one faced by Greece in the aftermath of the global financial crisis of 2007–08.
But she said countries would have to plan carefully how to shift course to medium-term fiscal consolidation to erase the increased pandemic-related debt burden.
Georgieva said that 110 countries among the IMF membership are at some stage of looking into central bank digital currencies, and a key challenge was how to guarantee interoperability of digital currencies.
"De-facto assets" like Bitcoin are not backed by assets that hold their value stable and can rise and fall sharply, Georgieva said, adding: "In the history of money, it is difficult to think of them as money."
She said the top consideration for policymakers exploring digital currencies is whether they can be a means of exchange that the public can trust. Other considerations are whether the digital currencies contribute to domestic economic stability and how they fit into international regulatory frameworks, such as those being developed by the Bank for International Settlements.
It is "very impressive how much the international community, the central banks, institutions like ours are now actively engaged to make sure that in this fast moving world of digitalization, money is a source of confidence and helps the economy function rather than (being) a risk."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.