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Lagarde: Cryptocurrencies are worthless and should be regulated

Lagarde: Cryptocurrencies are worthless and should be regulated

Updates: 21.05.2022 17:52

AMSTERDAM – Cryptocurrencies are not based on anything and should be regulated to prevent people from speculating on their life savings. Christine Lagarde, President of the European Central Bank (ECB), said this on Dutch TV today. He fears that people who do not understand the risks will lose everything and become very disappointed. Therefore, he believes that cryptocurrencies should be regulated.

Lagarde’s comment comes at a time when cryptocurrencies have been very turbulent – bitcoin and ether are down 50 percent from last year’s record. At the same time, this asset class is facing tighter regulatory oversight as authorities fear the risks cryptocurrencies could pose to the broader financial system.

Lagarde said she was skeptical about the value of cryptocurrencies. It has brought it into line with the digital euro, a project of the European Central Bank that could be implemented in the next four years.

“My very humble estimation is that (cryptocurrencies) have no value, they are not based on anything, and there are no underlying assets that can serve as a lifeline,” the central bank chief said. This should not be the case for the digital euro, as the European Central Bank will be behind it. Thus the digital euro should become a more secure store of value.

Bloomberg said concerns about cryptocurrency have been previously raised by other ECB officials. One of them is Executive Board member Fabio Panetta, who said in April that crypto assets were creating a new Wild West and compared it to the subprime mortgage crisis of 2008.

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Lagarde added that she herself had no coding because she wanted to keep what she was saying. But she watches them very carefully because one of her sons invested in them even though she did not advise him. “He is a free man,” she said.

The currency of the European economy, the currency of the Internet, Lagarde