The Governor of the Bank of England Mark Carney has received support from Germany and France to become the next head of the International Monetary Fund (IMF). This is according to a report by Frankfurter Allgemeine Zeitung that was released a few days ago. Mr. Carney has been a very strong critic of Bitcoin and has also given his opinion about Facebook’s digital asset Libra.
Mark Carney Could Become The Head Of the IMF
Christine Lagarde, the former head of the IMF could become the next European Central Bank (ECB) president, replacing the outgoing Mario Draghi. There are several countries that are backing her presence at the ECB and are very excited about what the future of the eurozone could look like.
As the head of the IMF, Lagarde seemed very opened about virtual currencies and, specifically, central bank digital currencies, also known as CBDCs. She has been analyzing how cryptocurrencies could change the financial landscape in many different countries and jurisdictions. However, she was always cautious about the effect these virtual currencies could have on the economy.
About it, during a conversation with CNBC, she commented:
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies or whatever… that is shaking the system. We don’t want to shake the system so much that we would lose the stability that is needed.”
She has also written an article titled “Winds of Change: The Case for New Digital Currency” in which she addressed the many risks related to CBDCs and crypto innovation. She also admits that technology is changing and that they (making reference to financial institutions) must also follow this changing environment.
Meanwhile, the Bank of England Governor has been somehow aggressive towards Bitcoin. Carney is expected to end his tenure at the UK central bank at the beginning of the next year. Although David Lipton has already been appointed at the head of the IMF for the next months, it is not clear whether the support provided by Germany and France to Mark Carney will be enough to accelerate the process of finding a stable head for the IMF.
Mark Carney suggested that Bitcoin was similar to a bubble and that it could be heading for “a pretty brutal reckoning.” Carney has also called for more regulations to the crypto market, something that Lagarde was also pushing during her time at the IMF. However, Mr. Carney seems to be against digital assets.
Rather than considering digital assets as positive for the market and the representation of a changing world, he believes that they are failing.
“The long, charitable answer is that cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users […] The short answer is they are failing,” Mark Carney commented at a speech he gave a few months ago.
He has also doubts about whether virtual currencies will ever become a medium of exchange. Finally, he has also mentioned that using Bitcoin is “quite a lottery” due to the price fluctuations that the digital asset experiences.
The IMF has very close contact with several countries and large influence in many of these economies. Mark Carney’s presence at the IMF would have different outcomes compared to Mrs. Lagarde efforts as the head of this institution. They have an opposite point of view regarding digital assets. Although Mark Carney said he is “open doors” towards these new technologies, Lagarde showed herself much more open towards changes than Mr. Carney.
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