K. Lagarde: Cryptocurrencies have no value and must be regulated

European Central Bank President Christine Lagarde has said that cryptocurrencies “are not based on anything” and should be regulated to prevent people from speculating on their livelihoods, according to Bloomberg.

Lagarde told Dutch television she was concerned about people “who do not understand the dangers, who will lose everything and who will be terribly disappointed, which is why I believe this needs to be addressed”.

The comments come amid turmoil in cryptocurrency markets, with Bitcoin and Ether digital currencies falling 50% from last year. At the same time, the asset class faces stricter control by regulators who are concerned about the risks it may pose to the wider financial system.

Lagarde said she was skeptical about the value of cryptocurrencies, contrasting them with the ECB’s digital euro – a plan that could bear fruit for the next four years.

“My very humble assessment is that it is worth nothing, it is not based on anything, there is no underlying asset that acts as a security anchor,” he said.

“The day we have the central bank digital currency, any digital euro, I guarantee it – so the central bank will be behind it and I think it’s very different from a lot of that,” Lagarde said.

Other ECB officials have already expressed concern. One of them is Executive Board member Fabio Panetta, who said in April that cryptocurrencies were “creating a new Wild West” and drew parallels with the 2008 mortgage crisis.

Lagarde said she did not own any cryptocurrencies because “I want to do what I preach.” But she watches them “very carefully”, as one of her sons invested – despite her advice. “He is a free man,” he said.