The ECB president said that while crypto has no underlying assets to ‘act as an anchor of safety’, the digital euro will be guaranteed by Europe’s central bank.
Europe’s central bank chief Christine Lagarde has dismissed crypto assets as “worth nothing” and advised against investing in them without being prepared to lose money, contrasting them with the digital euro in the works.
As president of the European Central Bank (ECB), Lagarde is responsible for the financial health of the monetary system in the EU.
In July last year, she said the bank had decided to “move up a gear” and commence an investigation phase into a digital version of the euro. A bill to introduce a digital euro could be tabled in the EU early next year, European finance commissioner Mairead McGuinness said in February.
Lagarde’s comments on crypto assets were shared on Dutch television show College Tour yesterday (22 May), where she was addressing an audience of mostly students.
“I’ve said all along that crypto assets are highly speculative, very risky assets. If you want to invest there, it’s your choice,” she said in response to a question about investing as a young person.
“But what I’m really concerned about when it comes to crypto assets is that those investments be made by people who have their eyes wide open about the fact that they can lose it all.”
Lagarde added that crypto should be regulated because people who think the assets will be rewarding have the potential to “lose it all” and be “terribly disappointed”.
“My very humble assessment is that it is worth nothing, it’s based on nothing, there is no underlying assets to act as an anchor of safety. 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.”
Last week, the ECB’s Dr Fabio Panetta told a Dublin conference that if current trends continue, “we could face a future in which cash loses its central role and its ability to provide an effective anchor as consumers turn to digital means of payment”.
“Confidence that €1 is €1, whatever form it takes, rests on our ability to convert, at par, private money – such as funds held in bank deposits or digital wallets – into public money, which is the safest form of money available,” he said, as reported by the Irish Times.
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