On Sunday (May 22), Christine Lagarde, President of European Central Bank (ECB), made a number of interesting comments about crypto while appearing as a guest on Dutch TV show “College Tour“.
The Paris-born French politician, economist, and lawyer has been the ECB President since November 2019. Before then, she served for over eight years as the Managing Director of International Monetary Fund (IMF).
The episode of Dutch TV show “College Tour”, which provides a forum for students to ask questions of interesting guests such as Lagarde, was aired this past Sunday (May 22).
In this article, we highlight her comments about crypto, which were mostly made in response to questions from the students in the audience.
On Decentralization of Finance and Crypto
“I was not thinking in terms of investing but you take me to that. So, I’ll go along with you. I’ve said all along that cryptoassets are highly speculative, very risky assets. If you want to invest there, it’s your choice. But what I’m really concerned about when it comes to cryptoassets is that those investments be made by people who have their eyes wide open about the fact that they can lose it all.
“I mean, it’s gone down by 20% last week, in the matter of one week. I’m concerned about, you know, those people who assume that it’s going to be a reward, who have no understanding of the risks, who will lose it all, and who will be terribly disappointed, which is why I believe that they should be regulated.“
On Whether or Not Young People Should Invest in Crypto
“What would I say in terms of where do you invest? Love!“
On Her Advice Regarding Crypto
“What I say is, number one, those who invest should know it cannot be this crypto hype where, you know, because a friend of a friend has made X, you think that it’s going to work and it’s going to continue to increase.
“It’s super risky assets. My very humble assessment is that it is worth nothing. It’s based on nothing. There is no underlying assets to to act as an anchor of safety… The day when we have the central bank digital currency out, any digital euro, I will guarantee. So, the central bank will be behind it, and I think that’s vastly different from any of those things.“
On the Size of ECB’s Balance Sheet
“Well, I can tell you that there is zero cryptoassets in the balance sheet of the ECB that I know… point number one…
“You have to think in terms of counterfactual. If we had not decided on March 18th, when we put together the pandemic emergency program and then subsequently increased the volume of commitment that we made to the European Union economies, we would be in a devastated situation.
“So, I don’t regret any of that move that we took on that day, which was four months into my job, to significantly increase the size of the balance sheet because that’s all we had. Otherwise, the economy would have collapsed, and it would have been even accelerated by financial crisis.“
On Whether or Not She Owns Any Crypto
“No, I don’t because I want to practise what I preach… I know how it works, and I actually have a son who invested in cryptos. So, I follow very carefully… I would not put my finger in there.“
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The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Featured Image by “moerschy” via Pixabay.com
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