Christine Lagarde Bashes Bitcoin and Libra
- The ECB president termed stablecoins as 'risky assets' but praised the digital euro.
Christine Lagarde, President of the European Central Bank (ECB), published an article on Monday mentioning the risks associated with the use of privately-owned Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. Lagarde criticised bitcoin and other stablecoins but spoke positively about the digital euro.
The official article published on 30 November in L’ENA hors les murs magazine stated that crypto users cannot rely on digital assets to maintain a stable value. Lagarde bashed the speculative and highly volatile nature of cryptocurrencies.
The ECB president also targeted global stablecoins backed by big technology firms, including Facebook-backed crypto project Libra. Lagarde added that the stablecoins present serious risks to the competitiveness and technological autonomy in the European region. She expressed concerns related to data privacy and the wrong use of personal information by large technology firms.
“If widely adopted, stablecoins could threaten financial stability and monetary sovereignty. For instance, if the issuer cannot guarantee a fixed value, or if they are perceived as being incapable of absorbing losses, a run could occur. Additionally, using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy,” Lagarde mentioned in the article.
Praise for Digital Euro
Despite a tough stance against bitcoin and other crypto assets, the ECB President expressed optimism regarding the digital euro. She termed the digital version of the euro as a 'unique' currency to meet evolving digital payment needs. “A properly designed digital euro would create synergies with the Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term industry and enable the private sector to build new businesses based on digital euro-related services. A digital euro would also be an emblem of the ongoing process of European integration and ultimately help to unify Europe’s digital economies,” Lagarde added.
Finance Magnates earlier reported about the significant progress made by the ECB to launch a digital euro, in October the central bank published a report on the digital version of the euro and launched a public consultation. Lagarde said in November that the ECB will launch a digital euro in the next 2 to 4 years.
Christine Lagarde, President of the European Central Bank (ECB), published an article on Monday mentioning the risks associated with the use of privately-owned Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. Lagarde criticised bitcoin and other stablecoins but spoke positively about the digital euro.
The official article published on 30 November in L’ENA hors les murs magazine stated that crypto users cannot rely on digital assets to maintain a stable value. Lagarde bashed the speculative and highly volatile nature of cryptocurrencies.
The ECB president also targeted global stablecoins backed by big technology firms, including Facebook-backed crypto project Libra. Lagarde added that the stablecoins present serious risks to the competitiveness and technological autonomy in the European region. She expressed concerns related to data privacy and the wrong use of personal information by large technology firms.
“If widely adopted, stablecoins could threaten financial stability and monetary sovereignty. For instance, if the issuer cannot guarantee a fixed value, or if they are perceived as being incapable of absorbing losses, a run could occur. Additionally, using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy,” Lagarde mentioned in the article.
Praise for Digital Euro
Despite a tough stance against bitcoin and other crypto assets, the ECB President expressed optimism regarding the digital euro. She termed the digital version of the euro as a 'unique' currency to meet evolving digital payment needs. “A properly designed digital euro would create synergies with the Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term industry and enable the private sector to build new businesses based on digital euro-related services. A digital euro would also be an emblem of the ongoing process of European integration and ultimately help to unify Europe’s digital economies,” Lagarde added.
Finance Magnates earlier reported about the significant progress made by the ECB to launch a digital euro, in October the central bank published a report on the digital version of the euro and launched a public consultation. Lagarde said in November that the ECB will launch a digital euro in the next 2 to 4 years.