European Central Bank President Christine Lagarde in EU Parliament.

ECB President Christine Lagarde slams digital currencies while backing CBDCs

Christine Lagarde, the president of the European Central Bank (ECB), has long held that digital currencies need regulations urgently. She has reiterated this stance, adding that digital assets have no value whatsoever.

Politico reports that Lagarde made the latest statement while speaking in an interview with a Dutch television show, College Tour. Digital currencies are just highly speculative and very risky assets, in her opinion, she remarked.

“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, there [are] no underlying assets to act as an anchor of safety,” Lagarde said.

Lagarde also talked up how much better a central bank digital currency (CBDC) will be than digital currencies. She highlighted that a CBDC would get value much like fiat currencies by being guaranteed by the central bank that issues it.

“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,” she voiced.

One of the world’s most powerful central bankers, Lagarde, has headed the European Central Bank (ECB) since 2019. She was also the managing director of the International Monetary Fund (IMF) from 2011 to 2019.

While the digital currency market has been showing wild volatility recently, warranting the remark, Lagarde’s comments mirror the sentiments of several EU officials. Board member of the ECB Fabio Panetta likened Bitcoin and other digital currencies to a Ponzi scheme.

ECB’s digital euro plans so far

Like many other central banks worldwide, the ECB also plans to release a CBDC. Back in February, CoinGeek reported that the European Commission announced that a digital euro bill would be proposed in early 2023. This bill will be the legal foundation for the euro central bank digital currency (CBDC).

The ECB has been conducting experiments and sampling public opinion on the digital euro. One of its recent publications was on the privacy options being considered for the CBDCs, which have been a major concern.

In the paper, the ECB highlighted that anonymity was not desired in its CBDC plans. However, the CBDC platform will have a tiered user information structure to allow low-value transactions to be made with little reporting requirements.

The earliest expected date of the CBDC prototype is in late 2023. A fully functional platform is expected by 2025 if the EU member states reach an agreement to go ahead with it.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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