’They’re Worth Nothing!’: Lagarde Comes For Crypto

May 23, 2022
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The European Central Bank chief has been unapologetic in her views on crypto-assets, as G7 economies stress the need for tighter regulation.

The European Central Bank (ECB) chief has been unapologetic in her views on crypto-assets, as G7 economies stress the need for tighter regulation.

Christine Lagarde, the governor of the ECB, has told a Dutch television show that crypto-assets are highly speculative and were not worth their time.

"My very humble assessment is that it is worth nothing,” said Lagarde, a former International Monetary Fund chief. “It is based on nothing, there are no underlying assets to act as an anchor of safety."

The French central banker also acknowledged that she had never invested herself, although her son had.

Lagarde joins her colleague, Fabio Panetta, in a rather unflattering point of view on the digital assets.

Panetta had previously described the market as a "wild west" and compared the rise of crypto-assets to the 2008 financial crisis.

In spite of making her anti-crypto views loud and clear, Lagarde was much more optimistic about the ECB’s digital euro project, pointing out that it will be backed by the central bank and thus safer to use.

This comes as Panetta has recently told a conference that a digital euro could be issued by the EU within four years.

Issues such as the prospect of Meta’s now abandoned Diem project, the Ukraine/Russia conflict and the EU’s desire to be a payments innovation leader have all played a role in making the project a priority for the EU’s institutions.

Lagarde’s intervention comes off the back of the G7 finance ministers’ latest communique.

“The G7 supports work by the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets and welcomes increasing global cooperation to address regulatory issues associated with the use of crypto-assets, including in cross-border payments,” the joint statement says.

The G7, currently under the direction of the German presidency, added that in light of the recent turmoil in the crypto-asset market, it urges the Financial Stability Board, in close coordination with international standard-setters, to advance the swift development and implementation of consistent and comprehensive regulation of crypto-asset issuers and service providers.

This would be with a view to holding crypto-assets, including stablecoins, to the same standards as the rest of the financial system.

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