ECB President Considers Crypto Assets as Worth Nothing

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Key Takeaways:

  • Christine Lagarde regards crypto as risky assets.
  • She appeared positive about the prospects of the digital euro

European Central Bank President Christine Lagarde took a dig at crypto assets by saying “that they aren’t worth nothing.

Lagarde, while in conversation with a Dutch TV show College Tour in an interview, said “I have said all along the crypto assets are highly speculative, very risky assets, My very humble assessment is that it is worth nothing. It is based on nothing, and there are no underlying assets to act as an anchor of safety.”

Her comments come at a time when the crypto market has been witnessing multiple crashes. Earlier in May, Bitcoin lost 20% of its value in a single week.

Lagarde also revealed that she doesn’t hold any crypto assets herself because she wants to practice what she preaches. She, however, said that her son has invested in crypto assets against her advice. Lagarde, commenting on digital euros, stated, “The day when we have the central bank digital currency, any digital euro, I will guarantee it. So the central bank will be behind it. I think that is vastly different from any of those things.”

The ECB President further addressed monetary policies, referring that the bank is all ready to hike interest rates in July to fight raging inflation in the eurozone. However, downplaying the chance of a 50 basis-point move, she said that a 50 basis-point hike “is not something that I can tell you at this point here today,” 

“We are going to follow the path of stopping net [bond] purchases and then sometime after that — which could be a few weeks — hike interest rates,” she said. Lagarde pointed out that she likely prefers a slower tightening path, and stated that the ECB doesn’t want to put the brakes on a “car that is moving.” Its goal is to “lift the accelerator  to slow inflation.”

ECB bond buys now are expected to be phased out early in the third quarter, opening the door for a rate hike sometime in July.

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Saniya Raahath
Saniya Raahath

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