Christine Lagarde, the President of the European Central Bank, stated that cryptocurrencies were “based on nothing” and should be regulated to prevent people from risking their life savings on them. Lagarde expressed her concern about those unaware of the risks, and might everything. She also encouraged governments all around the world to take steps to protect inexperienced investors who make significant bets on digital assets. Lagarde's comments come at a time when the cryptocurrency markets are shaky, with major digital assets like Bitcoin and Ether dropping by more than 50 percent from their highs last year.
During an interview with Dutch chat show College Tour a few days ago, Lagarde said in her “very humble assessment” cryptocurrency was “worth nothing” and “based on nothing”. She added that there was no underlying asset to operate as an anchor of safety.
Lagarde's lack of trust on cryptocurrencies isn't new. She has previously expressed worries about digital currencies' potential for money laundering and sanctions evasion, as well as their environmental impact.
During the chat show, when an audience member mentioned they lost 7,000 euros (approximately Rs 58,000) after purchasing the token Cardano, Lagarde said that it “hurts”.
Lagarde said that she didn't own any cryptocurrencies because she wanted to practice what she preached. Having said that, she added that she followed the cryptocurrency market diligently because one of her sons had invested in the digital assets.
In reaction to the rapid expansion of digital currencies, several central banks, including the European Central Bank, are developing their own virtual alternatives to cash. According to Lagarde, a digital euro would be very different from private cryptocurrencies because it will have the backing of the central bank.
Lagarde said she doesn't hold any crypto assets herself because “I want to practice what I preach.” But she follows them “very carefully” as one of her sons invested -- against her advice. “He's a free man,” she said.
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