Amid Looming Euro Zone Economic Downturn, ECB’s Lagarde Worries About Crypto, DeFi

Central Bank Cryptocurrency DeFi ECB EU Regulation
Last updated:
Author
Author
Jaroslaw Adamowski
Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships.
Christine Lagarde. Source: a video screenshot, Reuters / YouTube

 

While the 19 euro-using European Union countries face a gloomy economic outlook, European decision-makers are worried about the potential negative impact of cryptoassets and decentralized finance (DeFi) on the bloc’s financial stability — and per Christine Lagarde, President of the European Central Bank (ECB), they should intensify their work on a controversial regulation draft.

“Euro area activity is being dampened by high energy costs, intensified supply disruptions, and greater uncertainty which affects the manufacturing sector in particular,” Lagarde told EU lawmakers in a video released by Reuters.

At the same time, Lagarde seems to be worried about the risks posed by non-legacy finance to the EU’s financial stability and is looking forward to the implementation of the proposed Markets in Crypto-assets (MiCA) Regulation that is to provide a legal framework for cryptoasset markets for the bloc’s 27 member states. 

“We believe, as we are embarking on this work concerning crypto assets and the risk that they pose, that crypto assets and decentralized finance have the potential to pose real risk to financial stability,” she said.

This risk would be particularly robust “if the rapid growth of crypto asset markets and services continued in their interconnectedness with both the financial sector and the broader economy,” according to Lagarde.

“The ESRB general board supports the need for a quick adoption and implementation” of the MiCA, the president said, referring to the EU’s financial supervision body, the European Systemic Risk Board, which comprises representatives of the ECB, governors of member state central banks, and other key officials.

Among some of its proposed provisions, MiCA’s draft proposes extending the EU’s supervision over so-called ‘unhosted wallets‘ in what many industry representatives have called a disproportionate and harmful measure that could hamper the crypto industry’s development in Europe.

____

Learn more: 
Use of Digital Euro as Form of Investment Can be Prevented – ECB Official
ECB President Attacks Bitcoin Again As Digital Euro In Works

ECB President Touts Digital Euro, Bashes Bitcoin, Stablecoins
Even Christine Lagarde’s Son Doesn’t Listen to Her Warnings About Crypto

Bitcoin Fluctuates as European Central Bank Offers Cautious Tone on Monetary Policy Tightening
French Lawmaker Releases New Report to Push for Crypto Legislation

More Articles

DeFi News
Synthetix Acquires TLX in Token-for-Token Deal
Ruholamin Haqshanas
Ruholamin Haqshanas
2024-12-11 11:25:11
Blockchain News
Bitget COO Talks India Expansion, Stresses Compliance as Top Priority
Jai Pratap
Jai Pratap
2024-12-11 10:50:28
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors