Christine Lagarde, managing director of International Monetary Fund, believes blockchain innovators are shaking up the banking space, she shared in an interview with the CNBC. Lagarde, referring to fintechs and blockchain projects as disruptors, said they are having a clear “impact on the incumbents.”
The influence can be seen in JPMorgan Chase’s venture into issuing its own stablecoin, Lagarde said. Similarly, Lagarde pointed to the European Central Bank’s TARGET Instant Payment Settlement (TIPS) project launched last autumn. TIPS allows European banks and individuals to transfer large sums of money at “virtually no cost.”
“I think the role of the disruptors and anything that uses distributed ledger technology, whether you call it crypto assets, currencies or whatever, and it’s far from the Bitcoins we used to talk about a year ago, that is clearly shaking the system,” she said.
However, Lagarde did say blockchain and cryptocurrencies pose a threat to the traditional system in a sense they may shake it up too badly, destroying the needed stability in the process, Lagarde said. That’s why she believes “We have to be mindful of two things: trust, and the stability of the system.”
Regulators are mindful of wherever the competition is coming from, mentioning a Kenyan telecom company that has obtained a banking licence.