In a recent interview with the Dutch television programme College Tour, the president of the European Central Bank, Christine Lagarde, reiterated her earlier condemnation of cryptocurrencies, stating that they are “worthless” and are “based on nothing”.
This is not the first time Lagarde has criticised crypto assets. Previously also, she has called cryptocurrencies and other virtual digital assets to be highly speculative and risky investment vehicles.
Although the ECB president is not a fan of crypto assets, she has full faith in the Digital Euro, CBDC by the ECB.
The Digital Euro, according to Lagarde, would be different from cryptocurrencies since it would be backed by the Central Bank, allowing her to "guarantee" it.
Lagarde said, “The day when we have the central bank digital currency, any digital euro, I will guarantee it. So, the central bank will be behind it. I think that is vastly different from any of those things.”
Lagarde is not the only regulator concerned about cryptocurrencies and their impact on financial ecosystems. Finance ministers and central bank governors from the G7 countries convened on the 19th and 20th of May 2022 to discuss the recent crypto crash.
The discussion resulted in a stronger call for regulation of the entire crypto ecosystem in order to avoid massive losses like this.
Expert's take
Sharat Chandra, crypto expert and vice president, Research and Strategy at EarthID told Business Today, “Unfortunately, some regulators haven't moved beyond the oft-repeated refrain that cryptos do not have intrinsic value. In contrast, the forward-thinking ones realize the potential of crypto-tech with respect to fintech, creator economy, and meta-commerce.”
He further added, “The value of crypto-assets is directly linked to their utility, use cases which can be powered by them and the overall developer ecosystem they seek to support. Regulators should not be dismissive of crypto and work towards embracing it to foster innovation in financial services and drive financial inclusion.”
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