ECB President Attacks Bitcoin Again As Digital Euro In Works

Linas Kmieliauskas
Last updated: | 2 min read

After claiming that bitcoin (BTC) is highly volatile, illiquid and speculative, Christine Lagarde, President of the European Central bank, now called for global regulation of this most popular cryptocurrency.

Christine Lagarde. Source: The IMF

“(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” Lagarde said at the Reuters Next conference today, as reported by this news agency.

According to her, “there has to be regulation.”

“This has to be applied and agreed upon … at a global level because if there is an escape that escape will be used,” Lagarde said.

As reported, in 2019, illegal activity has accounted for less than 1% of all bitcoin activity — down from 7% in 2012.

Meanwhile, German police took down what they believe was the world’s largest illegal “Darknet” marketplace, DarkMarket, Bloomberg reported yesterday, adding that it facilitated at least 320,000 transactions — including 4,650 for bitcoin and 12,800 for monero (XMR) — valued at more than EUR 140m (USD 170m).

According to William Mougayar, an entrepreneur, investor, blockchain researcher, and advisor, these statements by Lagarde are an “ultimate display of misunderstanding cryptocurrencies potential.”

“Bitcoin & crypto are already regulated by proxy. [Anti-money laundering] applies to everything, and while many financial instruments are speculative, none are more transformative than cryptocurrencies,” he tweeted, while one of his followers replied that “they understand cryptos absolutely. They are just feared of it because they can’t put the money in their own pocket like taxes or other donations.”

In either case, as legendary investor and BTC bull Paul Tudor Jones warned recently, as cryptoassets fight a bloody battle for survival and the top, the authorities will, as they did before, lead their own fight against private cryptocurrencies.

Meanwhile, the ECB’s Governing Council is exploring the possibility of issuing a new central bank digital currency (CBDC), a digital euro, in an attempt to respond to the accelerating trend toward digitization in payments. Also, a recent paper authored by a group of economists and policymakers from the ECB stated that introducing “a CBDC sooner rather than later could give rise to a significant first-mover advantage to its issuer.”

At the time of writing (12:45 PM UTC), BTC trades at USD 34,382 and is down by 2% in a day and 1% in a week. The price rallied by 84% in a month and 314% in a year.

Learn more:
6 Most Common Misconceptions About Bitcoin Picked by Lyn Alden
Sovereigns Will ‘For Sure’ Fight Against Private Crypto – Paul Tudor Jones
ECB President Touts Digital Euro, Bashes Bitcoin, Stablecoins
Crypto Regulation in 2021: The Piecemeal Approach & New Winds
Response to Ray Dalio: Banning Bitcoin Is a ‘Game of Whack-a-Mole’
This Is How G20 Might Keep Crypto And Stablecoins at Bay
(This article was updated at 16:24 UTC: a video interview with Christine Lagarde and information about DarkMarket were added).