European Central Bank President Christine Lagarde
Since they started making major waves, there have been various opinions about cryptocurrencies. While they have been compared to others stores of value such as gold, they have received huge criticisms and continue to receive aversion because of how susceptible to fluctuations they are. Irrespective of these, cryptocurrencies have taken their place in the world and continue to develop and stay relevant.
While speaking in an interview on Dutch talk show “College Tour” that aired on Sunday, the European Central Bank President Christine Lagarde opined that cryptocurrencies have no value at all. “My very humble assessment is that it is worth nothing. It is based on nothing. There is no underlying asset to act as an anchor of safety.” This kind of comment isn’t new at all. There have been similar comments from other financial experts and concerned individuals in the past.
The European Central Bank President called for the protection of investors, especially the inexperienced ones who are taking huge risks on cryptocurrencies. She called on policymakers to create laws that ensure that investors are protected. Recently, the US Securities and Exchange Commission’s Chairman Gary Gensler, while speaking at the FINRA conference held last week called for the protection of crypto investors. He opined that investors, especially the everyday members of the public, are not getting full and fair disclosures adding that cryptocurrencies should be treated and regulated as securities. “The investment public is not getting disclosures…When you make other asset purchases, we have this basic bargain, you the investing public can make your choices about what risks you take,” the SEC boss said.
Leaving last year’s drama out of the picture, cryptocurrencies have continued to dip this year and the world’s largest cryptocurrency Bitcoin has erased all the gains it made in 2021. “I’m concerned about those people who think it’s going to be a reward, who have no understanding of the risks, who will lose it all, and who will be terribly disappointed, which is why I believe that should be regulated,” Christine Lagarde said.
During the interview, someone from the audience mentioned losing 7,000 euros to cryptocurrency Cardano and the European Bank President showed sympathy towards this person saying that “That hurts.”
The European Central Bank boss’ aversion to cryptocurrencies is not quite new. While at the International Monetary Fund (IMF), she criticized cryptocurrencies for how detrimental they are to the environment and how they can be used to launder money and fuel terrorism activities. She, however, mentioned a digital euro adding that it would be far more beneficial than cryptocurrencies. She also emphasized the difference between a digital euro and cryptocurrencies.