Govt regulation of cryptocurrencies is 'inevitable', says IMF chief

Cryptocurrencies will soon come under government regulation, International Monetary Fund (IMF) chief Christine Lagarde told CNNMoney at the World Government Summit in Dubai on Sunday.

"It's inevitable. It's clearly a domain where we need international regulation and proper supervision," she said, voicing concern over the "probable bit of dark activity” in cryptocurrencies.

Lagarde added that the IMF is actively trying to prevent digital currencies from being used to launder money or finance terrorism, noting that with the rise of cryptocurrencies, governments will have to shift from entity-based regulation to activity-based regulation.

“Forget about the entities, work on the activities themselves and who does what and who is licensed to do what and who is properly regulated and supervised,” she said.

Bitcoin crashed along with global stocks last week, falling 40 percent from a month ago to trade close to $8,350. It peaked at $19,343 on December 16, 2017.

Given the volatility and risks of digital currencies, Saudi Arabian Monetary Authority (SAMA) governor Ahmed Al-Kholifey warned in January against investing in Bitcoin, saying "trading in such digital currency is unprotected, used in speculation and illegal operations.”