Christine Lagarde, president of the European Central Bank, has warned that cryptocurrencies are worthless and should be regulated.
The ECB boss believes that regulating the sector will prevent people from gambling their life savings on cryptocurrencies.
“My extremely modest opinion is that cryptocurrency is worthless. It is founded on nothing, and there are no underlying assets to serve as a safety anchor,” she said.
Lagarde continued, “I have always stated 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 comprehend the risks, “who will lose everything,” and who would be severely disappointed by digital assets.
Mounting Pressure And Scrutiny
Lagarde made the remarks in the midst of challenging times for bitcoin markets, when major coins such as bitcoin and ether have lost half of their value from their 2017 peaks.
Cryptocurrencies are also receiving increasing scrutiny and pressure from global regulators, who frequently cite dangers to the financial system.
Other ECB officials have expressed doubts. Among them is Fabio Panetta, a member of the ECBs executive board. In April, he stated that crypto assets are “creating a new Wild West” and compared them to the subprime mortgage catastrophe 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 hold the same opinion.
However, the financial guru said that her son had invested in cryptocurrencies and failed miserably. Please download WikiBit for more blockchain news.
While condemning bitcoin and other related currencies, Lagarde says she will support the establishment of a Digital Euro, the blocs Central Bank Digital Currency (CBDC), as it will be supported by the ECB.
“The day when we have the central bank digital currency — any digital euro — I‘ll guarantee it,” Lagarde said. “So the central bank will be behind it. I think that’s vastly different from any of those things.”
Recently, Panetta stated that the digital euro might be implemented by 2026, establishing a timeline for its introduction. The project is now in the review phase, and since the ECB is intensifying its engagement with stakeholders, the implementation phase may not commence until the end of 2023.