- The President of the European Central Bank (ECB), Christine Lagarde, has stated that crypto-currencies are “based on nothing”.
- Her comments on the crypto industry follow the recent volatility seen in the crypto markets.
- An Executive Board member of the ECB also shared his concerns around crypto assets.
The President of the European Central Bank (ECB), Christine Lagarde, has stated that crypto-currencies are “based on nothing” and that they should be regulated. She believes that regulating the crypto industry will steer people away from speculating on cryptos with their life savings.
In an interview with Dutch television, Lagarde shared her concern with people “who have no understanding of the risks, who will lose it all and who will be terribly disappointed.” She also said in the interview that “I believe that the crypto industry should be regulated.”
Her comments on the crypto industry follow the recent volatility seen in the crypto markets, with popular digital currencies such as Bitcoin (BTC) and Ethereum (ETH) down around 50% from their peaks set last year.
According to Lagarde, “My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety.” Finally, she added that “The day when we have the central bank digital currency out, any digital euro, I will guarantee – so the central bank will be behind it and I think it’s vastly different than many of those things.”
Other ECB officials have also voiced their concerns. One of these officials is Fabio Panetta, an Executive Board member at the ECB. In April he said that crypto assets “are creating a new Wild West,” and drew parallels with the 2008 subprime mortgage crisis.”
At the same time, the digital asset class has come under even more scrutiny from global regulators who fear the dangers that the asset class may pose on the broader financial system.