(LEAD) IMF chief calls for rules, infrastructure to avoid risks of crypto assets

▲ International Monetary Fund Managing Director Kristalina Georgieva gives a keynote speech at an international conference on digital money in Seoul on Dec. 14, 2023. (Yonhap)

▲ South Korean Finance Minister Choo Kyung-ho (L) sits with International Monetary Fund Managing Director Kristalina Georgieva at an international conference on digital money in Seoul, Dec. 14, 2023. (Yonhap)

▲ International Monetary Fund Managing Director Kristalina Georgieva speaks at an international conference on digital money in Seoul on Dec. 14, 2023.

(LEAD) IMF chief-crypto assets

(LEAD) IMF chief calls for rules, infrastructure to avoid risks of crypto assets

(ATTN: UPDATES IMF chief's speech on empowering women in last 6 paras)

SEOUL, Dec. 14 (Yonhap) -- International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday urged the world to set clear rules and solid infrastructure to avoid the risks of crypto assets, warning that cryptocurrencies could eventually undermine macro-financial stability.

"Our goal is to make a more efficient, interoperable and accessible financial system by providing rules to avoid the risks of crypto, and infrastructure by leveraging some of its technologies," Georgieva said at an international conference in Seoul on digital money titled "Digital Money: Navigating a Changing Financial Landscape."

The IMF chief acknowledged that high crypto asset adoption could undermine macro-financial stability, such as by limiting monetary policy transmission, capital flow management measures and fiscal sustainability.

"The challenge is that high crypto asset adoption could undermine macro-financial stability," she said.

"And crypto could undermine fiscal sustainability if tax collection became volatile or more difficult to enforce," the IMF chief said. "That is a future we all want to avoid."

Despite these worries, digital money has became widespread and needs legitimate, consistent rules, such as legal foundations for anti-money laundering and taxation, as well as credibility and good infrastructure, she said.

"Good rules can spur and guide innovation. For instance, banks are exploring new trading infrastructure using blockchain technology refined and popularized by the crypto boom. They hope to cut costs and boost speed for trillions of dollars of daily asset transactions, and to broaden financial access to those currently content with low yielding deposit accounts," said Georgieva.

Participants at the two-day conference, jointly hosted by the IMF, the finance ministry and the Bank of Korea, will discuss measures for digital money, such as regulations and infrastructure, as well as a central bank digital currency.

Seoul's finance minister Choo Kyung-ho also said that despite a series of challenges, it is clear that transition to digital money is already happening, and it is unstoppable.

"Our goal is to establish sets of policy tools that not only support economic growth and financial innovation but also ensure reliability and stability," said Choo.

Each country and global institution needs to stay nimble to keep up with digital innovation, and focus on solutions to build public trust and stability on top of the convenience and efficiency provided by digital money.

"Finally, setting up global standards through close collaboration with governments and international bodies is essential, especially considering that digital money knows no borders," he said.

Later in the day, Georgieva attended a forum on empowering women titled "Women Corporate Directors' Korea Chapter."

She said empowering women can lead to higher incomes and stronger companies.

"IMF research shows that with the right policies to reduce the gender gap in number of hours worked to the average across peer countries, Korea could increase per capita income by 18 percent," she said.

To anyone who doubts women's ability to make a difference, the IMF chief recalled a groundbreaking major championship victory by South Korean golf legend Pak Se-ri in 1998, a milestone that influenced future generations of golfers in South Korea and across Asia.

"Years of hard work brought Pak to the top tier of her sport globally. Then, 25 years ago at the U.S. Women's Open, with her ball in a seemingly hopeless position, she took off her shoes, walked into the water, and made the impossible shot," she said.

"Now, a whole generation of girls she inspired has grown up and created a new tradition of excellence -- well beyond what anyone could have expected," Georgieva said.

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