Besides, the ECB chief also called out the need to regulate the entire crypto market. She said that clear regulations will help individuals from losing their life savings on digital assets.
Lagarde also expressed concerns for those who do not appreciate the risks and for those who are profoundly disillusioned by cryptocurrencies. She noted: "I've always stated that these types of assets are exceedingly speculative and risky.”
In the recent crypto market meltdown several global regulators have voiced their concerns while adding that cryptocurrencies are typically posing threats to the financial system. However, a Goldman Sachs report said that the crypto market size is very small in order to have any major impact on the U.S. economy.
Other ECB officials have also joined Lagarde in the crypto criticism. ECB executive Fabio Panetta compared the crypto fall to the 2008 subprime mortgage crisis.
The ECB President, however, remain in support for having a central bank digital currency (CBDC) aka Digital Euro. "I'll guarantee that we'll have a central bank digital currency - any digital euro - one day," Lagarde stated. “Therefore, the central bank will support it. I believe that this differs significantly from each of those things.”
Just a day after Lagarde’s comments, the Indian central bank has also raised a red alert on the use of cryptocurrencies. In his recent interview, RBI Governor Shaktikanta Das said: “We have been cautioning against crypto and look at what has happened to the crypto market now. Had we been regulating it already, then people would have raised questions about what happened to regulations.”