Christine Lagarde, President of the European Central Bank, said all cryptocurrencies in which she included stablecoins and speculative assets were “not currencies at all”.
In an interview with World Economic Forum founder and chairman Klaus Schwab on September 1, Lagarde said that cryptocurrencies “present themselves as currencies” but still see them as assets that are regulated and “monitored by asset regulators”. According to this definition, the ECB President claimed that fiat-linked digital currencies are also considered assets.
“Stablecoins pretend to be a coin, but in fact it is completely tied to an actual currency,” Lagarde said. “For example, some of them say they can be used for transactions, but the value is precisely matched to the dollar.”
She added that projects behind the issue of stablecoins should be required in order to fully fiat her assets:
“This has to be checked, monitored and regulated so that consumers and users of these devices are actually protected against any false information. I think recent history has shown that these reserve currencies have not always been available and as liquid as they should be. “
Lagarde may be referring to Tether, the largest issuer of stablecoins by market capitalization. The company recently agreed to pay $ 18.5 million in damages and periodically report its reserves through 2023 as part of a settlement with the New York attorney general who alleged the stablecoin issuer had incorrectly rated its USDT tokens were backed by fiat collateral.
Related: Pandemic Accelerated Digital Currency Adoption: ECB President
However, despite these seemingly strong opinions on digital assets, Lagarde made it clear that the ECB intends to act on its customers. It has already criticized stablecoins and cryptocurrencies, but has not ruled out the possibility that the ECB would introduce a digital central bank currency. In July the Governing Council announced that it would initiate the two-year investigation phase of a digital euro project.
“If customers prefer to use digital currencies rather than having banknotes and cash on hand, it should be available,” said Lagarde. “We should respond to this demand and have a solution that is based on a European level, that is secure, that is available and that offers friendly conditions that can be used as a means of payment.”