Christine Lagarde, president of the European Central Bank, has warned that cryptocurrencies are worthless and should be regulated.
The ECB boss believes regulating the sector will prevent people from gambling their savings on cryptocurrencies.
“My extremely humble opinion is that cryptocurrency is worthless. It is based on nothing and there are no underlying assets to serve as a security anchor,” she said.
Lagarde continued: “I have always argued that these types of assets are highly speculative and extremely risky.”
Lagarde said on Dutch television that she is concerned about those who do not understand the risks, “who will lose everything”, and who would be deeply disappointed by digital assets.
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Lagarde said her son had invested in cryptocurrencies (InBitcoinWeTrust).
Mounting pressure and control
Lagarde made the comments amid challenging times for bitcoin markets, when major coins such as bitcoin and ether lost half of their value from their 2017 peaks.
Cryptocurrencies are also receiving increasing attention and pressure from global regulators, who often cite dangers to the financial system.
Other ECB officials have expressed their doubts. Among them is Fabio Panetta, member of the Executive Board of the ECB. In April, he stated that crypto assets are “creating a new Wild West” and compared them to the subprime mortgage slump of 2008.
Lagarde doesn’t invest in crypto, but her son does
Lagarde pointed out that she has never invested in a digital currency, a statement that is not surprising given that other specialists in banking and finance are of the same opinion.
However, the financial guru said her son had invested in cryptocurrencies and failed miserably.
Total Market Cap of Crypto at $1.26 Trillion on the Weekend Chart | Source: TradingView.com
While condemning bitcoin and other related currencies, Lagarde says she will support the creation of a digital euro, the bloc’s central bank digital currency (CBDC), as it will be backed by the ECB.
“The day we have the central bank’s digital currency – any digital euro – I guarantee it,” said Lagarde. “So the central bank will be behind it. I think that’s very different from all those things.”
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Recently, Panetta stated that the digital euro could be introduced by 2026, setting a timeline for its adoption. The project is now in the assessment phase and as the ECB intensifies its engagement with stakeholders, the implementation phase cannot start until the end of 2023.
Featured image from Bloomberg.com, chart from TradingView.com