Cryptocurrency News

ECB President Says All Crypto Assets Are Not Currencies At All

European-Central-Bank’s president ‘Christine Lagarde’ stated that digital currencies, including speculative assets as well as stablecoins, are not to be categorized as currencies of any kind. On 1st September, while appearing in an interview with Klaus Schwab ( the executive chair and founder of World-Economic-Forum), Lagarde mentioned that cryptocurrencies place themselves as the currencies apparently; however, they are still categorized as assets that should be managed through regulators. According to this definition, the president described that fiat-pegged cryptocurrencies were also recognized as assets.

Stablecoins, she added, pretend to coin; nonetheless, they are entirely associated with a real currency. For example, some people say that stablecoins may be utilized to make transactions. Nevertheless, their rate will be directly united with the dollar. She further described that the programs at the back of the issuance of stablecoins need to completely support their assets through fiat. The stablecoins should be regulated, supervised, and checked to assist the consumers in protecting against any misrepresentation. According to her, recent history has elaborated that such reserve currencies could not be constantly accessible along with being as liquid as they appeared to be.

The point of Lagarde was to Tether, the biggest issuer of stablecoins, according to its market capitalization. The firm recently contracted to spend $18.5M on damages and the periodic reporting regarding their reserves till 2023, which is a part of a deal established with the Attorney General of New York, who accused that the issues of stablecoins had ill-represented the extent to which the fiat collateral backed the company’s USDT.

Nonetheless, notwithstanding such solid standpoints about digital assets, Lagarde clarified that ECB intended to reciprocate its consumers. She has formerly condemned cryptocurrencies and stablecoins; however, she did not deny the likelihood for ECB to launch its CBDC (central-bank-digital-currency). In July, the governing council of ECB would initiate the inquiry segment of a project for digital euro, which will last up to approximately two years.

She went on to discuss that the bank considers the demands of the clients and provides the proper resources. If the consumers wish to utilize digital currencies instead of banknotes as well as the existing cash, they should be provided with that opportunity. The solution to the demand will be provided by a European-based digital currency that is friendly, secure, and can be utilized for payment means.

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