IMF chief says Europe can keep away from debt disaster, laborious to consider Bitcoin as cash

24

WASHINGTON, Oct 5 (Reuters) – Medium-term fiscal consolidation and progress will put Europe on a sound footing to keep away from one other sovereign debt disaster regardless of rising debt ranges attributable to the COVID-19 pandemic, the top of the International Monetary Fund mentioned on Tuesday.

Managing Director Kristalina Georgieva, talking remotely to an occasion hosted by Bocconi University in Italy, mentioned she regards digital currencies backed by central banks to be essentially the most dependable type of digital cash and that it’s tough to consider Bitcoin and different crypto belongings as cash.

Georgieva mentioned that Europe was healthier to keep away from one other debt disaster such because the one confronted by Greece within the aftermath of the worldwide monetary disaster of 2007–08.

But she mentioned nations must plan fastidiously learn how to shift course to medium-term fiscal consolidation to erase the elevated pandemic-related debt burden.

Georgieva mentioned that 110 nations among the many IMF membership are at some stage of trying into central financial institution digital currencies, and a key problem was learn how to assure interoperability of digital currencies.

“De-facto assets” like Bitcoin usually are not backed by belongings that maintain their worth steady and might rise and fall sharply, Georgieva mentioned, including: “In the history of money, it is difficult to think of them as money.”

She mentioned the highest consideration for policymakers exploring digital currencies is whether or not they could be a technique of change that the general public can belief. Other issues are whether or not the digital currencies contribute to home financial stability and the way they match into worldwide regulatory frameworks, equivalent to these 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.”

Reporting by Andrea Shalal and David Lawder; Editing by Giles Elgood

International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks during a closing news conference for the International Monetary Finance Committee (IMFC), during the IMF and World Bank's 2019 Annual Meetings of finance ministers and bank governors, in Washington, U.S., October 19, 2019.   REUTERS/Mike Theiler