"It's [cryptocurrency regulation] inevitable. We have had an entity-based regulation over the course of the last ten years after the financial crisis. We clearly have to move into activity-based regulations," Lagarde said on Sunday, as quoted by the broadcaster.
The IMF chief stressed the need for "international regulation and proper supervision" and added that the organization was actively trying to prevent the use of cryptocurrencies for money laundering or financing of the terrorism.
French Finance Minister Bruno Le Maire, German acting finance chief Peter Altmaier, Banque de France head Francois Villeroy de Galhau and Bundesbank President Jens Weidmann have recently sent a letter to their G20 colleagues stressing the need for digital tokens regulation and the dangers that cryptocurrencies may pose to investors. G20 finance ministers and central bank governors are set to meet in Buenos Aires on March 19 and March 20.
Cryptocurrencies are using blockchain to provide high levels of security and anonymity if used correctly. Such levels, however, appeared to be the cause of concern for several governments around the globe amid fears that criminals might take advantage of the anonymity. Also, such cryptocurrencies like Bitcoin - the most popular of them all — are decentralized, which makes them particularly difficult to control.