Crypto Assets Are Absolutely Not Currencies, According to European Central Bank President Christine Lagarde

European Central Bank (ECB) president Christine Lagarde is drawing a hard line between crypto assets and traditional currencies.

In a new interview on the David Rubenstein show, Lagarde lays out why she believes the word “cryptocurrency” is a misnomer.

 

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

I think we have to distinguish between cryptos that are highly speculative, suspicious occasionally, and high-intensity in terms of energy usage. Assets, but not a currency.”

Bitcoin’s actual environmental impact is a hotly debated subject, with a recent report from the Bitcoin Mining Council (BMC) stating that in the second quarter of 2021, the use of sustainable energy for Bitcoin mining rose above the 50% barrier.

“The global mining industry’s sustainable electricity mix had grown to approximately 56%, making it one of the most sustainable industries globally.”

In addition, many altcoins are energy-efficient, although their level of decentralization varies. TRG Datacenters compiled a list of what it considers to be the most environmentally friendly crypto assets, with IOTA, XRP, and Chia at the top.

As far as suspicious activity in crypto is concerned, in its latest overview on the real-world use of crypto among bad actors, blockchain analytics firm Chainalysis finds that crypto-related crime dropped to 0.34% of total transaction volume in 2020, down from 2.1% in 2019.

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

“You have those stablecoins that are beginning to proliferate… which are a different animal and need to be regulated, where there is oversight which corresponds to the business that they are actually conducting.

And in all that, you have the central banks who are prompted by the demands of customers to do something that will make the central bank and central bank currencies fit for the century we are in. Which is why we are now all looking at 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 a digital form. We want customers to have their preference. If they still want to hold those banknotes and cash, fine.”

Back in February, Lagarde also indicated that a digital version of the Euro is coming.



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