Crypto ‘worthless’ and should be regulated: European Central Bank president

European Central Bank President Christine Lagarde said cryptocurrencies “are not based on anything and should be regulated” to prevent people from speculating on them with their savings.

Lagarde told Dutch television that she is worried about people “who have no understanding of the risks, who are going to lose everything and who will be terribly disappointed, that’s why I think it should be regulated”.

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The comments come amid turbulent times for the crypto markets, with digital currencies Bitcoin and Ether down 50% from last year’s peak. At the same time, the asset class is coming under greater scrutiny from regulators worried about the dangers it may pose to the broader financial system.

Lagarde said she was skeptical of the crypto’s value, comparing it to the ECB’s digital euro – a project that could come to fruition within the next four years.

“My very humble assessment is that it’s worth nothing, it’s not backed by anything, there’s no underlying asset to act as a security anchor,” she said.

“The day we have central bank digital currency, any digital euro, I will guarantee it – so the central bank will support it and I think that’s very different from a lot of these things,” Lagarde said. .

Other ECB officials have already expressed concerns. One of them is board member Fabio Panetta, who said in April that crypto-assets are “creating a new Wild West”, and drew a parallel with the subprime mortgage crisis of 2008. .

Lagarde said she doesn’t own any crypto assets herself because “I want to practice what I preach.” But she follows them “very carefully” because one of her sons invested – against her advice. “He’s a free man,” she said.

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Mary I. Bruner