White House and IMF consider cryptocurrency monitoring

Bitcoin and other cryptocurrencies could be monitored by the White House with a view to possible federal regulation, a White House spokesperson has said.

Cryptocurrencies are digital currencies which use cryptographic techniques to process transactions and supply. This year, US investors have invested heavily in cryptocurrencies, most notably bitcoin, which has recently crossed the $10,000 mark, having grown by 900 per cent so far in 2017.

During a White House press conference, a Fox Business Network reporter queried about how the Trump administration may handle the ongoing cryptocurrency boom.

White House press secretary Sarah Huckabee Sanders said that White House staff in the Homeland Security team have been monitoring cryptocurrencies, including bitcoin.

“I know this is something that is being monitored by our team here,” said Sanders.

“Tom Bossert, with the Homeland Security team, an advisor to the president, has brought this up in a meeting earlier this week. I know this is something he is keeping an eye on and we’ll keep you posted when we have anything further on it.”

Although Sanders did not share any further details on how the Trump team may approach cryptocurrencies, her comments are noteworthy due to being the first time the White House has commented on cryptocurrencies.

Recently, key figures from the International Monetary Fund have stressed that it is important to consider bringing cryptocurrencies under regulation. During a press briefing this week, Gerry Rice of the IMF said that cryptocurrencies and their underlying technologies had potential benefits, such as promoting financial inclusion and streamlining payment and settlement processes.

“On the other hand, we have also alerted for, cautioned, that cryptocurrencies can also pose considerable risks as potential vehicles for such things as money laundering, terrorist financing, tax evasion and so on. So there’s a need for a balanced assessment of cryptocurrencies,” he said.

“In our view, cryptocurrencies […] should be subject to appropriate regulation and supervision. A key challenge for country authorities will be to contain risks without stifling the innovation associated with cryptocurrencies.

In October, IMF Managing Director Christine Lagarde commented that cryptocurrencies and other emerging financial technologies would cause “massive disruptions”. She did not rule out the idea of the IMF developing its own cryptocurrency at some point in the future. The IMF has previously created its own currency: the Special Drawing Right.

Discussions are underway in many countries about the regulation of cryptocurrencies. In South Korea, for instance, the country’s financial regulator is completing regulations for cryptocurrency exchanges which would treat the use of cryptocurrency exchanges as unauthorised fundraising. In August, China banned the practice of raising funds through launches of digital currencies.

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