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The president of the European Central Bank (ECB), Christine Lagarde, warned that cryptocurrencies are prone to money laundering. She agrees with the governor of the Bank of England, Andrew Bailey, who recently said that cryptocurrencies have no intrinsic value and investors should be prepared to lose all their money if investing in them.
ECB Chief Lagarde Sees Crypto as a âReal Riskâ for Investors
European Central Bank (ECB) chief Christine Lagarde talked about cryptocurrency Friday during a webinar hosted by the European University Institute. She said:
Crypto-currencies â these two things donât go well together and I totally agree with Dr. Baileyâs conclusion in that respect.
Lagarde further noted that âThere are crypto assets ⊠which people are free to invest in and take total risk into, and there are particular cryptos that are, in my view, so prone to money laundering activities.â She did not mention any cryptocurrencies by name.
When asked whether the ECB is competing with cryptocurrencies with its digital euro, Lagarde said that cryptocurrencies are different from stablecoins and central bank digital currencies (CBDCs). By investing in cryptocurrencies, the ECB chief emphasized that âitâs a real risk that people are taking,â citing the bank of England governor, Andrew Bailey.
Bank of England governor Andrew Bailey said at a press conference Thursday that cryptocurrencies âhave no intrinsic value.â However, he noted: âThat doesnât mean to say people donât put value on them, because they can have extrinsic value. But they have no intrinsic value.â
A longtime crypto skeptic, the Bank of England chief reiterated:
Iâm going to say this very bluntly again. Buy them only if youâre prepared to lose all your money.
The U.K.âs financial regulator, the Financial Conduct Authority (FCA), similarly said in January that âInvesting in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investorsâ money ⊠If consumers invest in these types of product, they should be prepared to lose all their money.â
This is not the first time that Lagarde voiced concerns about money laundering relating to cryptocurrencies. In January, the ECB president said that cryptocurrency is âa highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.â
Her comments outraged many in the crypto community. Daniel Lacalle, fund manager and chief economist at Tressis Gestion, for example, responded: âThat is absolutely outrageous when we all know that the vast majority of money laundering globally is conducted in fiat currencies, particularly in U.S. dollars and euros.â
What do you think about Lagardeâs comments about bitcoin and other cryptocurrencies? Let us know in the comments section below.
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