European Central Bank President Christine Lagarde today issued a provocative statement on the crypto market. He generally says that cryptocurrencies are not worth a ‘penny’.
Lagarde in one of the interviews with the Dutch talk show "College Tour" which aired stated that "his‘ insignificant ’assessment is that this cryptocurrency is not worth anything”. On the plus side, it is not based on anything and has no underlying assets to act as a safety anchor.
Lagarde called on global policymakers to enact comprehensive regulations to protect investors especially those who are still new to the market. The cryptocurrency market has faced several episodes of downturn resulting in bitcoin which is the largest cryptocurrency having erased more than half of its value since its all -time high of November.
Lagarde stressed that he worries if people misunderstand the risks and even sometimes see it as an opportunity to double the rewards. This has left many new investors trapped and here is the importance of regulation.
The former head of the International Monetary Fund’s skepticism of crypto is nothing new. He had previously also raised concerns over the environmental impact of cryptocurrencies, as well as the potential for their use in money laundering and evading sanctions.
His latest comments come as drafters try to do more in -depth research in response to the fall of the terraUSD. One controversy that ensued has tarnished sentiment towards stablecoin whose goal is to be pegged 1: 1 to the US dollar.
Several central banks are working on CBDC as an alternative to stablecoin, the ECB is one of them. The digital euro will be “very different” from private cryptocurrencies, Lagarde said.
