General Director of the Internal Monetary Fund (IMF) Kristalina Georgieva poses as she arrives to attend the dinner in honor of the Heads of State and Government and leaders of international organizations participating in the 6th Paris Peace Forum, at the presidential Elysee Palace in Paris on Nov 9, 2023. (PHOTO / AFP)

SEOUL — The head of the International Monetary Fund (IMF) said on Thursday that crypto currencies need to be regulated because they pose risks to financial stability.

"The challenge is that high crypto asset adoption could undermine macro-financial stability," the IMF's managing director, Kristalina Georgieva, said in her opening speech at a conference in Seoul on digital currencies.

When it comes to the development of digital money, Georgieva said in a panel discussion policymakers could either be part of it and help do it better

She said high crypto asset adoption could affect the effectiveness of monetary policy transmission, capital flow management measures and fiscal sustainability due to volatile tax collection.

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"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 the joint conference with the South Korean government and central bank.

Rules are not meant to "return us to a pre-crypto world, nor to squash innovation," she said.

"Good rules can spur and guide innovation."

When it comes to the development of digital money, Georgieva said in a panel discussion policymakers could either be part of it and help do it better, or be left out of it - because it would be done anyway.

There is "tremendous interest" in learning from each other, with the "biggest interest" in learning from emerging markets, she said, pointing to India specifically for its digital public infrastructure.

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In this file photo dated Tuesday, Jan 16, 2018, a man passes by a screen showing the prices of bitcoin at a virtual currency exchange office in Seoul, South Korea. (PHOTO / AP)

Advanced economies' experience in their own history of money is also very valuable experience, Georgieva said.