ECB President Christine Lagarde has openly stated that Bitcoin and crypto are not currencies.
She made this statement to Bloomberg, with claims that have caused debate.
Lagarde’s comments on cryptocurrencies
For Christine Lagarde, cryptocurrencies are speculative assets that claim to be currencies.
In addition, in some cases, they have suspicious uses and consume a lot of energy. These are her words:
“Cryptos are not currencies. Full stop. Cryptos are highly speculative assets that claim their fame as currency, possibly, but they’re not. They are not. I think we have to distinguish between cryptos that are those highly speculative, suspicious occasionally, and high-intensity in terms of energy consumption assets but they’re not a currency”.
Controversy
Anthony Pompliano, who has been defending Bitcoin fiercely, responded harshly to these words:
“Imagine claiming that a $1 trillion asset doing billions of dollars in daily on-chain transaction volume isn’t a currency.
Same asset that is legal tender in a country!
She has destroyed the purchasing power for millions, while this new tech preserves it”.
Imagine claiming that a $1 trillion asset doing billions of dollars in daily on-chain transaction volume isn’t a currency.
Same asset that is legal tender in a country!
She has destroyed the purchasing power for millions, while this new tech preserves it.pic.twitter.com/VZQglVfUFA
— Pomp
(@APompliano) September 16, 2021
It is worth analyzing Pompliano’s reply point by point.
Christine Lagarde tried to belittle an industry that is now worth $2 trillion, of which, almost half is Bitcoin’s market cap. In addition, cryptocurrencies today have volumes of hundreds of billions of dollars. Moreover, what Lagarde says is not a currency, namely Bitcoin, has recently become a fully-fledged currency recognized in a country, El Salvador.
Then there is the well-known controversy.
The accusation of having destroyed the purchasing power of millions of people is probably linked to her past leadership of the IMF. The IMF is a member of the Troika, the trio that includes the ECB and the European Commission, which imposed strict rules on Greece to repay its debts. The country avoided default (which would have been a terrible risk for the eurozone as a whole), but on the other hand, the so-called austerity made the population suffer, including pension cuts, privatisations, taxes and the dismissal of state employees.
So, one might ask, who is speculating?
The web went wild
The statements of the ECB President caused a stir in the crypto community, which went wild on Twitter.
Some wanted to point out to Christine Lagarde that it is not up to her to decide what a currency is. What people decide to use as a medium of exchange becomes a currency.
Others responded by reminding her of past legal troubles. Other comments pointed to the fact that printing money also involves energy (as compared to mining Bitcoin).
Europe and cryptocurrencies
In any case, these words leave no room for interpretation: it will be hard for cryptocurrencies to find their place in the European Union, at least as long as Christine Lagarde is at the head of the ECB.
It is probably also because of the awareness of the growing popularity of crypto that the ECB has given the green light to study the digital euro. After all, users are showing that they want to have digital assets in their portfolios, and an institution like the ECB cannot pretend not to. Lagarde herself has repeatedly said that it is necessary to respond to customers’ requests. It will happen with the digital euro, but not with Bitcoin.
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