(Bloomberg) – European Central Bank President Christine Lagarde says cryptocurrencies are not “based on anything” and should be regulated to keep people from speculating about their life savings.
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Lagarde told Dutch television he was concerned about people “who have no idea about the risk, who will lose it all and who will be terribly disappointed, so I believe it should be controlled.”
These comments come at a bad time for the crypto market, with digital currencies Bitcoin and Ether down 50% from last year’s highs. At the same time, the asset class is facing stiff scrutiny from regulators concerned that it could pose a threat to the larger financial system.
Lagarde said he was skeptical of the value of crypto, in contrast to the ECB’s Digital Euro – a project that could be fruitful in the next four years.
“My very humble assessment is that it has no value, it is not based on anything, it has no inherent resources to act as a security anchor,” he said.
“The day our central bank’s digital currency runs out, any digital euro, I guarantee – so the central bank will be behind it and I think it’s very different from a lot of those things,” Lagarde said.
Other ECB officials have already expressed concern. One is Fabio Panetta, a member of the executive board, who said in April that crypto-assets were “creating a new wild waste,” and drew parallels with the 2008 subprime mortgage crisis.
Lagarde says he does not own any crypto assets because “I want to practice what I promote.” But she follows them “very carefully” because one of her sons has invested – against her advice. “He is an independent man,” she said.
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