European Central Bank President Christine Lagarde reiterated her concerns over cryptocurrencies and desire for regulation.
“My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety,” Lagarde said in an interview on Dutch television, according to media reports. The ECB president said she is particularly worried about people who don’t understand the risks associated with the volatile digital currencies and “will lose it all.” That, she said, “is why I believe that that should be regulated.”
Lagarde’s comments are no surprise. She has long expressed her discomfort with cryptocurrencies, which have exploded in popularity alongside a long stretch of ultra-low global interest rates that have sent investors hunting for yield. The ECB took interest rates below zero in 2014; the central bank’s main policy rate now sits at negative 0.5%. Outside of the eurozone, countries including Switzerland and Japan also have negative interest rates.
In the U.S., the Federal Reserve lifted rates from zero in March and is expected to hike another half-percentage point, to a range of 1.25% to 1.5%, next month.
The latest crypto-criticism out of the ECB mirrors concerns voiced by U.S. leaders and comes amid a painful stretch for cryptocurrency investors. Earlier this month, Treasury Secretary and former Fed Chairwoman Janet Yellen called for new federal regulation over cryptocurrencies. “
We really need a regulatory framework to guard against the risks,” said Yellen, referring to the type of cryptocurrencies that are called stablecoins, which are pegged to a currency such as the dollar. Her comments came during a House committee hearing after the Terra LUNAUSD 0.00% stablecoin, one of the biggest such coins, fell below $1 and triggered chaos in crypto markets.