Christine Lagarde, President of the European Central Bank, has warned that cryptocurrencies are worthless and should be regulated.
The ECB chief believes that regulating the sector will discourage people from gambling their life savings into cryptocurrencies.
“My extremely humble opinion is that cryptocurrency is worthless. It’s based on nothing, and there are no underlying assets to act as a safety anchor,” she said.
Lagarde continued, “I have always said that these types of assets are highly speculative and extremely risky.”
Lagarde said on Dutch TV that she is worried about those who don’t understand the risks, “who will lose everything” and who are severely disappointed in digital assets.
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Lagarde said her son invested in cryptocurrencies (InBitcoinWeTrust).
Increasing pressure and testing
Lagarde made the remarks amid challenging times for bitcoin markets, when major coins like bitcoin and ether have lost half their value since their 2017 highs.
Cryptocurrencies are also coming under increasing scrutiny and pressure from global regulators, who often cite dangers to the financial system.
Other ECB officials have expressed doubts. Among them is Fabio Panetta, a member of the Executive Board of the ECB. In April, he declared that crypto assets are “creating a new Wild West,” comparing them to the subprime mortgage disaster 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 since other banking and finance professionals share the same opinion.
However, the financial guru said her son invested in cryptocurrencies and failed miserably.
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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 is backed by the ECB.
“The day we have the central bank digital currency — every digital euro — I will guarantee that,” Lagarde said. “So the central bank will be behind it. I think that’s very different from all those things.”
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Panetta recently stated that the digital euro could be launched by 2026 and set out a timeline for its rollout. The project is now in the review phase and as the ECB intensifies its engagement with stakeholders, the implementation phase may not start before the end of 2023.
Featured image from Bloomberg.com, chart from TradingView.com