European Central Bank President Christine Lagarde has warned that cryptocurrencies are useless and should be regulated.
The ECB boss believes that regulating the sector will prevent people from betting their life savings on cryptocurrencies.
“My extremely humble opinion is that cryptocurrency is worthless. It is founded on nothing, and has no underlying asset to serve as a security anchor,” she said.
Lagarde continued, “I have always said that this type of asset is highly speculative and extremely risky.”
Lagarde said on Dutch television that he is concerned about those who do not understand the risks, “who will lose everything,” and who will be seriously disappointed with digital assets.
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Lagarde said her son had invested in cryptocurrencies (InBitcoinWeTrust).
mounting pressure and probe
Lagarde made the remarks in the midst of challenging times for the bitcoin markets, when major coins such as bitcoin and ether have lost half of their value since their 2017 peak.
Cryptocurrencies are also receiving increasing scrutiny and pressure from global regulators, who often cite threats to the financial system.
Other ECB officials have expressed doubts. Among them is Fabio Panetta, a member of the ECB’s executive board. In April, he said that crypto assets are “forming a new Wild West” and compared them to the subprime mortgage disaster of 2008.
Lagarde Doesn’t Invest In Crypto, But His Son Does
Lagarde explained that he has never invested in a digital currency, a statement that is not surprising as other experts in banking and finance hold similar opinions.
However, the financial guru said that his son had invested in cryptocurrencies and failed miserably.
Crypto total market cap at $1.26 trillion on the weekend chart | Source: TradingView.com
Condemning bitcoin and other related currencies, Lagarde says she would support the establishment of a digital euro, the Block’s central bank digital currency (CBDC), as it would be backed by the ECB.
“The day we have a central bank digital currency – any digital euro – I will guarantee that,” Lagarde said. “So the central bank will be behind it. I think it’s pretty different from all those things.”
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Recently, Panetta stated that the digital euro could be implemented by 2026, setting a timeline for its launch. The project is now in the review phase, and as the ECB is intensifying its engagement with stakeholders, the implementation phase may not begin until the end of 2023.
Featured image from Bloomberg.com, chart from TradingView.com