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Christine Lagarde was nominated to succeed Mario Draghi as president of the ECB. These are the great news for the crypto community because she is the one who pushed for central banks to consider the notion of issuing digital assets.
Christine Lagarde has been nominated to be a Mario Draghi’s ECB Successor. That is a really good news for the crypto community. Let’s just mention that the European Central Bank, which has its headquarters in Frankfurt, sets monetary policy and supervises banking for the 19 countries that use the common European currency, the euro.
ECB operates much like the Federal Reserve in the United States, printing money, setting benchmark interest rates and encouraging people to spend or save depending on the needs of the region’s economy. Main element of its job is to maintain price stability and keep inflation in check across a swath of Europe that stretches from the Nordic nations to the Mediterranean.
Trained lawyer, the former French finance minister is credited with turning around the Washington-based IMF after it was thrown into turmoil by the abrupt resignation of her predecessor Dominique Strauss-Kahn following unproven allegations of sexual assault and attempted rape.
As per Guardian, Lagarde, 63, was confronted by an organisation that had not only lost its leader in regrettable circumstances, but was also hampered by warring factions at odds over policymaking after being blindsided by the 2008 financial crisis.
Kahn, on the other hand, hoped that he was going to returnto his native France to challenge François Hollande as the left’s anti-austerity presidential candidate, Lagarde’s background was in Conservative politics. Let’s not forget that before joining the IMF, Lagarde served as a finance minister in Nicolas Sarkozy’s right of centre government.
Mark Sobel, a former US Treasury official and chairman of the Official Monetary and Financial Institutions Forum said that she’s been a tremendous ambassador for the fund, a great salesperson, a very good communicator. He said:
“Lagarde has experience in monetary policy even if she has never led a central bank and, like US Federal Reserve Chairman Jerome Powell, is not an economist. She’s been involved in all the monetary debate and it’s not like they don’t discuss monetary policy at the fund.”
Her second term in office coincided with the rise of US President Donald Trump and a wave of confrontations among major economies over trade, which the former French finance minister described as the major threat to the world economy.
Let’s just mention that Lagarde was always “pro-crypto”. She pushed for central banks to consider the notion of issuing digital assets.
In April, she acknowledged that assets and startups using distributed ledgers are having a significant impact on the financial sector—”whether you call it crypto assets, currencies, or whatever.”
She was pretty much eager to point out that these assets and companies would have to be regulated, to ensure that they could be trusted by investors and the public. She said:
“We don’t want to shake the system so much that we would lose the stability that is needed.”
Also she said that central banks from some European states are already moving in that direction. She took Sweden’s Riksbank for example saying they were considering a digital currency—but not a cryptocurrency because its value would be backed by the government.
That kind of cooperation between traditional financial power structures on the one hand, and distributed ledgers on the other, seems to be Lagarde’s preferred way to go on.