The International Monetary Fund (IMF) has published a discussion document indicating that banks around the world should begin to seriously consider investing in cryptocurrencies and other fintech opportunities, as a means of adapting to new consumer and technological demands.
“From artificial intelligence to cryptography, rapid advances in digital technology are transforming the financial services landscape, creating opportunities and challenges for consumers, service providers, and regulators alike,” the group said.
Given the IMF’s mandate to promote the stability of the international monetary system, the paper focuses primarily on the rapidly changing nature of cross-border payments using these new currencies.
However, it also highlighted a number of other benefits, including new business opportunities for consumers and regulators as well as improved cross-border trade and reduced barriers of entry.
In addition, it highlighted ongoing concerns with the stability and integrity of new fintech (including cyber-attacks, money-laundering and terrorism financing), but noted that this could and should be effectively managed without stifling innovation.
“Overall, the financial services sector is poised for change. But it is hard to judge whether this will be more evolutionary or revolutionary. Policy making will need to be nimble, experimental, and cooperative.”
“At the same time, regulatory authorities need to balance carefully efficiency and stability trade-offs in the face of these rapid changes,” it said.