European Central Bank (ECB) President Christine Lagarde has warned that cryptocurrencies have no value and should be regulated.
The ECB president believes that regulating the sector could prevent people from saving their lives in cryptocurrencies.
“My most humble opinion is that cryptocurrencies have no value. It’s not based on anything and has no underlying assets to act as safety anchors,” she said.
“I always said that these types of assets are very speculative and very risky,” Lagarde continued.
Lagarde said on Dutch television he is concerned about people who don’t understand the risks, people who will “lost everything” and who will be greatly disappointed by their digital assets.
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Lagarde said her son had invested in cryptocurrencies (InBitcoinWeTrust).
Mounting pressure and irradiation
Lagarde made these remarks during a difficult time in the Bitcoin market, with major coins like Bitcoin and Ethereum losing half of their value from their 2017 highs.
Cryptocurrencies are also under increasing scrutiny and pressure from global regulators who often mention risks to the financial system.
Other ECB officials have expressed their doubts. Among them is Fabio Panetta, a member of the ECB Executive Board. In April, he said crypto assets are “creating a new western frontier,” comparing it to the 2008 subprime mortgage catastrophe.
Lagarde Doesn’t Invest In Crypto, But Her Son Invests
Lagarde notes that she has never invested in digital currencies, which is not surprising given that other experts in banking and finance are of the same opinion.
However, a financial expert says her son invested in cryptocurrency and failed miserably.
Crypto total market cap at $1.26 trillion on the weekend chart | Source: TradingView.com
In denouncing Bitcoin and other related currencies, Lagarde said he would support the establishment of the Digital Euro, a central bank digital currency (CBDC) of blocks that will be backed by the ECB.
“It will guarantee the day there is a central bank digital currency (digital euro),” Lagarde said. “So the central bank will be behind it. I think it’s very different from those things.”
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Recently, Panetta revealed that the digital euro will be implemented by 2026 and has set a timeline for its adoption. The project is currently in the review phase and the implementation phase may not start until the end of 2023 as the ECB is strengthening stakeholder engagement.
Featured image from Bloomberg.com, chart from TradingView.com