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Christine Lagarde Blasts Crypto As Worthless, Calls for Regulation

Christine Lagarde Blasts Crypto As Worthless, Calls for Regulation
  • European Central Bank President Christine Lagarde has been highly critical of cryptocurrencies in an interview led by Dutch students.
  • Lagarde said digital tokens are “not worth anything” and “based on nothing.”
  • Those who do not understand the risks will be sorely disappointed, she said, calling for regulation.

European Central Bank President Christine Lagarde on Saturday criticized cryptocurrencies, saying they “are worth nothing” and should be regulated to protect people from depleting their savings.

In an interview program led by Dutch students, Lagarde said, “What really worries me when it comes to crypto assets is that these investments are made by people who have their eyes wide open about the fact that they can lose everything.”

These people, she said, “don’t have an understanding of the risks, who is going to lose everything, who is going to be very disappointed, which is why I think this should be regulated.”

Saturday’s comments come after a massive sell-off across the crypto markets that began in early May, which brought with it a major stablecoin crash and massive losses in major coins including bitcoin, ether, cardano, solana, and dogecoin.

At the height of the sell-off, Ether lost nearly 20% in a single day, while Bitcoin dropped below $25,500 for the first time since December 2020.

“My very humble estimation is that it is nothing, it is not underpinned by anything, and there are no underlying assets that act as a safety anchor,” Lagarde said, according to Bloomberg.

Lagarde has expressed reservations about cryptocurrencies in the past, and has called for more regulation over bitcoin, the most widely traded digital currency. Last year, she said she does not consider bitcoin a real currency, adding that central banks won’t be holding it in their reserves anytime soon.

“Extremely unlikely – I would say out of the question,” said Lagarde. She added that the token was used for some “funny business”, including money laundering.

The cryptocurrency crash this month has sparked a conversation among some of the industry’s leading figures about the need for stricter regulation. For example, Circle CEO Jeremy Allaire said in an interview with Yahoo Finance that the internal collapse of TerraUSD has given lawmakers an incentive to accelerate regulation of the cryptocurrency market.

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