ECB President Christine Lagarde: “Cryptos are not currencies, full stop.”

Speaking on a wide-ranging interview with David Rubenstein published on Thursday, ECB President and crypto-skeptic Christine Lagarde made it clear that her negative views on cryptocurrencies had not changed.

Rubenstein asked for her comments on a whole range of financial and economic issues. These included COVID, variants and vaccinations; remote working at the ECB and the outlook for it in Europe; diversity and discrimination against women; the ECB’s economic stimulus package; inflation; climate change; and Brexit.

Lagarde on cryptos

On cryptos, Rubenstein asked: Do you think that cryptocurrencies are a plus for the global economy, or is it too early to tell?

Lagarde segregated her response between cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs).

On cryptos, Lagarde was critical as usual.

“Cryptos are not currencies, full stop,” she said. “Cryptos are highly speculative assets that claim their fame as currency, possibly, but they are not.”

Though cryptos were “highly speculative, suspicious occasionally – and high intensity in terms of energy consumption,” she reiterated that “they are not a currency.”

On the other hand, the ECB President described stablecoins as “a different animal and need to be regulated.”

She said that stablecoins had begun to proliferate after promotion by big techs. “There has to be oversight that corresponds to the business that they are actually conducting, irrespective of how they named themselves,” Lagarde remarked.

Lagarde was far more positive on CBDCs, revealing that she “was certainly keen to push the CBDC issue on our agenda because I believe that we have to stand ready for that.”

Her rationale: “Central banks…are prompted by customer demand to produce something that will make the central bank and central bank currencies fit for the century we are in, which is why we are now looking at CBDCs – central bank digital currencies.”

She also made it clear that CBDCs would co-exist with paper currencies depending on consumer preferences.

“If they still want to hold those banknotes and cash, fine, then it should continue to be available and around.”

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