The European Central Bank is investigating whether it will issue its own digital alternative to cash.
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Christine Lagarde, president of the European Central Bank, thinks cryptocurrencies are worth less than a penny.
“My humble assessment is that it’s not worth it,” Lagarde said of the crypto in an interview with the Dutch talk show “College Tour” aired on Sunday.
“It’s not based on anything,” he added. “There are no inherent resources to act as a security anchor.”
Lagarde called on global policymakers to enact rules to protect inexperienced investors from making big bets on digital assets. Cryptocurrencies have plummeted across the board this year, with Bitcoin – the world’s largest – wiping out more than half of its value since its all-time high in November.
“I’m concerned about people who think this is going to be a reward, who have no understanding of the risks, who will lose it all and who will be terribly disappointed, so I believe it should be controlled,” Lagarde said.
A member of the audience said they lost 7,000 euros ($ 7,469) after buying the token cardano, to which Lagarde responded: “It hurts.”
The former head of the International Monetary Fund’s skepticism about crypto is not new. He has previously raised concerns about the environmental impact of digital currencies, as well as their potential use in money laundering and tax evasion.
His recent comments come at a time of higher scrutiny of the crypto market as regulators are reacting to the fall of Terra USD, a controversial so-called stablecoin that has always been worth 1.
Several central banks are working on their own virtual alternative to cash in response to the rapid growth of digital currencies – the ECB being one of them. A digital euro would be “hugely different” from the private cryptocurrency, Lagarde said.