Christine Lagarde, the head of the European Central Bank, has always been against cryptocurrency. A position that she assumes and continues to claim. In September last year, she had already declared that Bitcoin was not a currency. Later, she speaks again on the subject and evokes cryptocurrency as a threat. In his latest statement, Lagarde persists in saying that crypto is worthless. On the other hand, it supports the digital Euro.
Christine Lagarde denounces a threat to banks
Last March, Christine Lagarde took advantage of her participation in the innovation summit of the Bank for International Settlements (BIS) to share his apprehensions about cryptocurrencies. She speaks, she says, on behalf of central banks around the world, calling cryptocurrency ” threatens “. Digital assets promote money laundering and other financial crimes. Lagarde even mentions the financing of terrorism and other criminal activities.
Cryptocurrency would also have allowed Russia to circumvent the sanctions imposed on it. International regulators have indeed imposed severe sanctions on the Kremlin following its invasion of Ukraine. And this, to weaken its economy. But obviously, the country has turned to cryptocurrencies. Russian ruble invests in bitcoin and stablecoins reportedly skyrocketed. Finally, Lagarde argues that Bitcoin, which she still does not consider a currency, has the potential to render the ECB and other traditional financial institutions entirely obsolete.
No to cryptos, yes to the digital euro
Christine Lagarde stands firmly against cryptocurrency but is just as fervently supportive of the digital euro. The monetary unit of the European Union in digital version, she says, is ” is very different from any of these things “. Digitization affects absolutely all sectors. The world of finance is no exception. Central banks around the world are considering the implementation of a virtual currency. Moreover, China is already well advanced in its projects. The Middle Kingdom has already experimented with the digital yuan since 2020.
The ECB, for its part, plans to unveil the digital euro within five to seven years. Like banknotes, the digital euro remains sovereign money which benefits from a guarantee subscribed by the ECB. This is the most reliable guarantee possible. According to Ursula Von der Leyen, the president of the European Commission, the digital euro that will allow users to carry out a wide range of transactions, is underway. The ECB is currently conducting internal experiments with the digital euro and plans to start working on a prototype in late 2023. The transition will be complex, hence the importance of testing.
Beyond her contempt for cryptocurrencies, Christine Lagarde seems to really want to dismiss current digital assets that risk thwarting her plans to implement the digital euro. Lagarde particularly fears Bitcoin (BTC) whose adoption continues to grow. At this rate, peer-to-peer digital currency could become a widely accepted medium of exchange. And with enough adoption, bitcoin can be recognized as a monetary unit just like fiat money.
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Interested in investment and financial markets after a business school in Chambéry, the passion for cryptocurrencies was obvious. The blockchain is surely the universal tool of tomorrow.