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ECB chief Christine Lagarde: Crypto is ‘worth nothing’

The European Central Bank is examining whether to issue its own digital alternative to cash.

Olivier Matthys | AFP | Getty pictures

European Central Bank President Christine Lagarde believes cryptocurrencies are not worth a penny.

“My very humble assessment is that it is not worth anything,”[ads1]; Lagarde said of Krypto in an interview with the Dutch talk show “College Tour” which was broadcast on Sunday.

“It’s based on nothing,” she added. “There is no underlying asset that can serve as an anchor for security.”

Lagarde urged global decision-makers to put in place rules to protect inexperienced investors who invest heavily in digital assets. Cryptocurrencies have plummeted across the board this year, with bitcoin – the world’s largest – erasing more than half of its value since its records in November.

“I’m worried about the people who think it’s going to be a reward, who do not understand the risk, who will lose everything, and who will be terribly disappointed, and that’s why I think it should be regulated,” Lagarde said.

A member of the show’s audience said they lost 7,000 euros ($ 7,469) after buying the token cardano, to which Lagarde replied: “It hurts.”

The former International Monetary Fund’s skepticism about crypto is not new. She has previously raised concerns about the environmental impact of digital currencies, as well as their potential use in money laundering and evasion of sanctions.

Her latest comments come at a time of increased scrutiny of the crypto market as regulators react to the fallout from the collapse of terraUSD, a controversial so-called stablecoin that was always meant to be worth $ 1.

Several central banks are working on their own virtual alternatives to cash in response to the rapid growth of digital currencies – the ECB is one of them. A digital euro would be “completely different” from private cryptocurrencies, Lagarde said.

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