Technology

Christine Lagarde says crypto is worth nothing

The European Central Bank is exploring whether to issue its own digital alternative to cash.
Olivier Matthys | AFP | Getty Images

European Central Bank President Christine Lagarde thinks cryptocurrencies aren’t worth a dime.

“My very humble assessment is that it is worth nothing,” Lagarde said of crypto in an interview with Dutch talk show “College Tour” that aired Sunday.

“It is based on nothing,” she added. “There is no underlying asset to act as an anchor of safety.”

Lagarde called on global policymakers to put rules in place to protect inexperienced investors making big bets on digital assets. Cryptocurrencies have plunged across the board this year, with bitcoin — the world’s largest — erasing more than half of its value since its November all-time highs.

“I’m concerned about those people who think it’s going to be a reward, who have no understanding of the risks, who will lose it all, and who will be terribly disappointed, which is why I believe that should be regulated,” Lagarde said.

One member of the show’s audience said they lost 7,000 euros ($7,469) after buying the token cardano, to which Lagarde responded: “That hurts.”

The former International Monetary Fund chief’s skepticism of crypto isn’t new. She’s previously raised concerns about the environmental impact of digital currencies, as well as their potential use in money laundering and sanctions evasion.

Her latest comments arrive at a time of heightened scrutiny of the crypto market as regulators react to the fallout from the collapse of terraUSD, a controversial so-called stablecoin that was meant to always be worth $1.

Several central banks are working on their own virtual alternatives to cash in response to the rapid growth of digital currencies — the ECB being one of them. A digital euro would be “vastly different” from private cryptocurrencies, Lagarde said.

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