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Skepticism towards cryptocurrencies is not new, especially from regulators and financial agencies. The ECB is no exception. In a recent interview with Bloomberg, European Central Bank (ECB) President Christine Lagarde stated categorically:
“Cryptos are not currencies, period.”
Like other regulators, Lagarde shares the view that cryptos are “highly speculative” and “occasionally suspect” to be equated with currencies.
Not so long ago, South African Lesetja Kganyago also said that crypto is not a currency, but an asset. Referring to currencies, Kganyago explained that they are a generally accepted medium of exchange, that they constitute a store of value and a unit of account. As for cryptos, he said,
“It is only accepted by those who participate.
The head of Mexico’s central bank also agrees that crypto is a “high risk investment” and a “bad store of value.” It was in this context that he referred to Bitcoin as barter, instead of fiat money – a stark contrast to El Salvador’s “acceptance” of Bitcoin as legal tender.
Lagarde also highlighted the regulatory concerns associated with stablecoins. Calling for the regulation of companies that promote stablecoins, she added,
“There has to be an oversight that fits the business they actually run, however they call themselves.”
Oddly, his statement came just after reports from the US SEC continuing its crackdown on the digital asset stuck.
What do regulators think of CBDCs?
According to Lagarde, the regulator will give preference to customers and, therefore, CBDCs will receive cash “side by side”.
Currently, the ECB is a serious competitor when it comes to developing a central bank digital currency (CBDC). According to the American think tank Atlantic Council, 81 countries are considering the use case of retail and / or wholesale CBDCs. While China is one of the first, the report also places Europe considerably higher than the United States in the development of CBDC.
The European Central Bank could consider CBDCs to increase market efficiency. Recently, Jens Weidmann, Member of the Governing Council of the ECB, said:
“On the other hand, the CBDC could stimulate competition between banks and promote new services. “
Meanwhile, many in Europe are also in favor of creating a CBDC, according to a poll.
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