Christine Lagarde, president of the European Central Bank has insisted cryptocurrencies are worthless and that they pose a high risk to global economies.
Speaking to a Dutch Television Show College Tour aired Sunday, Lagarde, stated that cryptocurrencies were based on nothing, suggesting that they only thrive off of speculation.
“I have said all along the crypto assets are highly speculative, very risky assets,” said Lagarde. “My very humble assessment is that it is worth nothing. It is based on nothing, there is no underlying assets to act as an anchor of safety.”
Lagarde, who previously served as Chair and Managing Director of the International Monetary Fund between 2011 and 2019 went on to reveal that she had never invested in any cryptocurrency. However, her son had invested in some with little success.
Lagarde’s comments come on the heels of a devastating market pulling-back that has thrust cryptocurrencies into a seven-month decline. Earlier last month, the crypto sell-off was further exacerbated by TerraUST (UST) dropping below the dollar value, causing a panic sell-off across major crypto assets, with Bitcoin dropping over 20% in under a week.
In the following weeks, regulators worldwide have been keen on addressing crypto regulation, seeing how devastating the LUNA incident had been, with over $40 billion going down the drain in less than a week.
During the show, Lagarde however expressed confidence in CBDCs, especially the digital Euro which is in the works, noting that it would be a game-changer.
“The day when we have the central bank digital currency, any digital euro, I will guarantee it,” she added. “So the central bank will be behind it. I think that is vastly different from any of those things.”
In March, the ECB chief had hit out at crypto service providers terming them as “accomplices” to dodging sanctions against Russia. Speaking at the Bank for International Settlements’ Innovation Summit on March 22, she had gone on to suggest that cryptocurrencies were largely associated with crime.
“When you look at a lot of the dubious transactions that are taking place, a lot of the criminal activities payments that are taking place, very often you find some crypto assets,” Lagarde had said.
The ECB has previously called for expedited finalization of the Markets in Crypto Assets Regulation (MiCA) legislation which seeks to regulate digital assets in the EU region. “There are always criminal ways to try to circumvent a prohibition, which is why it’s so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework.” Lagarde was quoted as saying in February.
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