By
Tolu Ajiboye
April 17th, 2024
he ECB predicts that the digital euro will be available in two years.
In uneasy times like this, European Central Bank (ECB) President Christine Lagarde expresses her fears and concerns about crypto and crypto companies. The absence of uniform and global crypto-assets regulations avails the fate of the digital asset to chance and emotions. In one instance, it saves the situation. At other times, it is considered a means to an end.
The irregularities seem unending and may do more harm than good to every stakeholder. This is clear in the case of the Russian Ruble against the Dollar. Crypto transactions have made the Ruble circulate more than Dollars regardless of economic sanctions. Despite all sanctions, the trade volume of the Ruble reached an ATH in nine months. It soared over low records of the Dollar since the invasion of Ukraine. Christine Lagarde believes Crypto merchants are Russian accomplices for eluding sanctions. Steps have been taken to warn the said merchants. According to Lagarde:
“We have taken steps to clearly signal to all those who are exchanging transacting offering services in relation to crypto assets.”
Again, as there are speculations of Russia turning to crypto to evade sanctions, some officials and analysts believe it is impossible. Notably, the Bank of Russia recently gave Sberbank the approval to participate in the crypto space.
ECB President Christine Lagarde Views Crypto a Threat
Lagarde’s point of view on the matter seemingly presents crypto as an all-time threat to peace and stability. She posits that many dubious transactions are concluded through crypto payments. While this may be correct, it is not entirely true because fraudsters also use fiat currencies. The ECB President had earlier ascertained the importance of swiftly establishing and implementing the EU proposed regulative array for digital assets. Especially regarding that sanctioned organizations in Russia will turn to crypto to elude sanctions. The proposed Markets in Crypto Assets (MiCA) framework is currently moving through the EU’s complex legislative process.
Previously, the ECB said crypto does not pose any threat to the eurozone’s financial stability. This was the conclusion of an analytical study by ECB’s Internal Crypto-Assets Task Force (ICA-TF). For a fact, recent events could have triggered a different view from pioneers of the bank. However, the reasons for the former should still be relevant.
There is also the possibility that the threat allegations against crypto are ECB’s attempt at grumbling against Russian Sberbank’s exit from the European market.
ECB Will Create a Digital Euro
ECB plans on creating a digital euro, and Christine Lagarde is vocal about it. She mentioned the plans at a moderator’s urging on Tuesday. Before now, US regulators were of the opinion that the creation of Central Bank Digital Currencies (CBDCs) should be gradual. Now, Lagarde said that the opinion might have changed for several reasons, including demand from customers. The ECB predicts that the digital euro will be available in two years.
Lagarde said the digital Euro ought to be “operational, faster, easier, cheaper, more secure across the whole of Europe.” She added that a digital currency should improve inclusion and support financial stability. The essence of digital currency is to prevent other players from taking advantage of the idea before its fruition. It is neither a monetary policy instrument nor a means to eliminate cash.