Christine Lagarde, Managing Director of the International Monetary Fund (IMF), has called for international cooperation in order to tackle the perils of cryptocurrencies such as bitcoin.

“[I]t would not be wise to dismiss crypto-assets; we must welcome their potential but also recognize their risks,” Lagarde said in a blog post. “By working together, and leveraging technology for the public good, we can harness the potential of crypto-assets while ensuring that they never become a haven for illegal activity or a source of financial vulnerability.”

Lagarde highlighted the “perils of crypto-assets” saying that their decentralized structure and lack of backing from any central bank, gives crypto-asset transactions an element of anonymity similar to cash transactions.

“The result is a potentially major new vehicle for money laundering and the financing of terrorism,” she said. “Of course, money laundering and terrorist financing is only one dimension of the threat. Financial stability is another. The rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create new vulnerabilities.”

In order to fight these challenges, Lagarde believes that the same innovations that power crypto-assets can also help in regulating them.

“To put it another way, we can fight fire with fire,” she said. “Regulatory technology and supervisory technology can help shut criminals out of the crypto world.”

To that end, Lagarde underscored the potential of distributed ledger technology (DLT), artificial intelligence (AI), biometrics, and cryptography to remove the “pollution from the crypto-assets ecosystem.”

She firmly believes that no country can handle this challenge alone and called for close international cooperation for the efforts to be truly effective. Lagarde welcomed the decision of the Group of Twenty (G-20) to put crypto-assets on the agenda of its November 2018 summit in Argentina.

“Since crypto-assets know no borders, the framework to regulate them must be global as well. Countries will have to decide collectively that this path is worth pursuing,” she added.