- ECB President Christine Lagarde says “cryptos” are not currencies
- Crypto supporters react by saying central banks fear the cryptocurrency revolution
ECB’s Lagarde Says “Cryptos are not currencies”
The President of the European Central Bank, Christine Lagarde, shared her remarks last week on the hot cryptocurrency market. She talked about bitcoin, stablecoins and the sector growing in popularity among central banks, CBDCs, or central bank digital currencies.
In an interview with Carlyle Group co-founder David Rubenstein, Ms. Lagarde presented an emphatically dismissive view on bitcoin and cryptocurrencies.
“Cryptos are not currencies. Full stop,” she said during the interview when asked “whether cryptocurrencies were a plus for the global economy” or it was too early to tell. “Cryptos are highly speculative assets that claim their fame as currency, possibly, but they’re not. They are not.”
It is worth noting that Ms. Lagarde did not use the term cryptocurrencies even once, as she did not recognize the fast-developing asset class as a form of currency.
She went on to bash cryptocurrencies even further. She said there must be a distinction between two types of digital currencies. On the one hand there are “cryptos that are those highly speculative, suspicious occasionally, and high intensity in terms of energy consumption assets, but they’re not a currency.”
Ms. Lagarde Speaks on Stablecoins and CBDCs
On the other hand, “you have those stablecoins that are beginning to proliferate, which some big techs are trying to promote and push along the way, which are a different animal and need to be regulated, where there has to be oversight that corresponds to the business that they’re actually conducting, irrespective of how they name themselves.”
Ms. Lagarde proceeded to make the case for central bank digital currencies (CBDCs). She stressed that central banks around the world, including the European Central Bank and the US Federal Reserve, have been “prompted by a demand of customers to produce something that will make the central bank and central bank digital currencies fit for the century we are in, which is why we are not all looking at CBDC.”
The Crypto Community Reacts
Ms. Lagarde’s scathing remarks on bitcoin and the digital asset space, including her reluctance to call cryptocurrencies by their real name, sparked a backlash among crypto circles. Below the video published on the Bloomberg Twitter account, users commented that the ECB was afraid of the crypto revolution as it threatened the central bank’s control over the monetary system.
A separate article on Nasdaq.com scrutinizes Ms. Lagarde’s comments on cryptocurrencies as it explains central banks fear losing power over money.