Crypto assets are worthless, says ECB’s Christine Lagarde – POLITICO
FRANKFURT — European Central Bank President Christine Lagarde isn’t hiding her feelings about the value of crypto assets — namely, there aren’t any.
“I’ve always said that crypto assets are highly speculative and very risky assets,” Lagarde told Dutch TV show College Tour in an interview to be published. broadcast on Sundays. “My very humble assessment is that it is worthless. It is not backed by anything, there are no underlying assets to act as a security anchor.”
The comments come as the crypto market, more broadly, takes a beating. Earlier this month Bitcoin lost 20% of its value in a single week.
Lagarde revealed that she has never invested in crypto assets, but her son has – with little luck.
A digital euro, however, would be a whole different ball game, Lagarde explained.
“The day we have central bank digital currency, any digital euro, I will guarantee it,” she said. “So the central bank will be behind this. I think it’s very different from any of these things.”
Lagarde also touched on monetary policy, again signaling that the ECB is ready to raise interest rates in July to combat runaway inflation in the euro zone. However, she appeared to play down the possibility of a 50 basis point move – a more drastic option that Dutch central bank chief Klaas Knot had recently floated. Current market expectations call for an increase of 25 basis points.
“We will follow the path of the dead stop [bond] bond purchases and then some time after that – which could take a few weeks – raise interest rates,” Lagarde said. ECB bond purchases are currently expected to be phased out at the start of the third quarter, opening the door to a rate hike in July.
A 50 basis point hike “is not something I can tell you at this point here today,” she added.
Instead, she signaled that she may favor a slower tightening path, warning that the ECB does not want to put the brakes on a “moving car”. Its objective is to “raise the accelerator…to slow inflation”.