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Crypto assets are absolutely not currencies, says European Central Bank President Christine Lagarde

By on September 17, 2021 0

European Central Bank (ECB) President Christine Lagarde draws a hard line between crypto assets and traditional currencies.

In a new interview on David Rubenstein’s show, Lagarde explains why she thinks the word “cryptocurrency” is a misnomer.

“Cryptos are not currencies – period. Cryptos are highly speculative assets that claim their fame as a currency, but they are not.

I think you have to distinguish between cryptos which are very speculative, sometimes suspect, and high intensity in terms of energy consumption. Assets, but not a currency.

Bitcoin’s actual environmental impact is a hotly debated topic, with a recent report from the Bitcoin Mining Council (BMC) indicating that in Q2 2021, the use of sustainable energy for Bitcoin mining has passed the bar. of 50%.

“The sustainable electricity mix of the global mining industry has reached around 56%, making it one of the most sustainable industries in the world. “

Additionally, many altcoins are energy efficient, although their level of decentralization varies. TRG Datacenters has compiled a list of what it considers to be the most environmentally friendly crypto assets, with IOTA, XRP and Chia leading the way.

Regarding suspicious activity in crypto, in its latest look at the actual use of crypto among bad actors, blockchain analytics firm Chainalysis finds that crypto-related crime has fallen to 0.34 % of total transaction volume in 2020, compared to 2.1% in 2019.

Despite Lagarde’s criticisms of the entire crypto space, she acknowledges that the rise in stablecoins and consumer demand are prompting central banks to officially enter the digital asset space.

“You have these stable pieces that are starting to proliferate… that are a different animal and need to be regulated, where there’s oversight that matches the activity they’re actually doing.

And in all of this you have the central banks being prompted by customer demands to do something that will make the central bank and central bank currencies fit for the century we find ourselves in. That is why we are now looking at all CBDCs, central bank digital currencies.

So that instead of having banknotes and cash in our pockets or in our wallets, we can have exactly the same thing but in digital form. We want customers to have their preference. If they still want to keep those bills and cash, fine.

In February, Lagarde also indicated that a digital version of the euro was coming.

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