Christine Lagarde, President of the European Central Bank, made anti-crypto statements on “The David Rubenstein Show: Peer-to-Peer Conversations.” Stating “Cryptocurrencies are not currencies, full stop”
Concerning the global purpose of cryptocurrency and whether it is too early to determine one, Lagarde asserted that the decentralized sector is backed by a highly speculative asset class that falls well short of the definition of currency.
“Cryptocurrencies are not currency, period. Cryptocurrencies are extremely speculative investments that purport to be a currency but are not. They aren’t… I believe we must distinguish between cryptos and those assets that are highly speculative, dubious at times, and high in terms of energy consumption but are not currencies.”, she stated.
The European Central Bank’s President on Stablecoins
Additionally, the ECB President discussed stable coin challenges. Lagarde emphasizes the rapid growth of stable coins facilitated by big data. Nonetheless, she contends that, despite their distinction from standard coinage, they should be regulated. The ECB President adds that while stablecoins are less hazardous or volatile, they nevertheless belong under the category of money, which is managed by private players.
“On the other hand, there are those stable coins that are beginning to proliferate, which some large tech companies are attempting to promote and push along the way, which are a different animal and require regulation, where there must be an oversight that corresponds to the business they are conducting, regardless of how they refer to themselves.”
On CBDCs, the President of the European Central Bank
Christine Lagarde’s tone shifted from offensive to defensive when she addressed CBDCs. She stated that the CBDCs was established solely to maintain relevance in the age of technology. Additionally, she asserted that CBDCs are centralized digital currencies that simplify life in the digital age, rather than making it riskier, as crypto does. She also clarified that CBDCs will not be necessary and will coexist with regular fiat, i.e., consumers will have the choice of payment method.
“And then there are the central banks, who are being motivated by consumer demand to develop something that would make the central bank and central bank digital currencies fit for the century we are living in, which is why we are not all looking at CBDC… Rather than carrying banknotes and currency in our pockets and wallets, we may have the exact same thing in a digital form. As a result, we are all working on this, and I was eager to push the problem, the CBDC issue, onto our agenda because I believe that we must be prepared.”
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