ECB President Warns Against Bitcoin and Altcoins amid Sharp Correction in Crypto Market

The crypto market continues to show major volatility as the overall crypto space corrects 6% in the last 24 hours. The crypto market remains volatile this month after a massive rally in August. Christine Lagarde, President of the European Central Bank (ECB) has issued a stern “suspicious” warning on Bitcoin. Besides, she also named a number of altcoins that have rallied tremendously in recent months.

This includes Ethereum, Cardano, BNB, XRP, Solana,  and Dogecoin. The ECB President refers to all of these cryptocurrencies, including Bitcoin, as highly “speculative” assets. During her recent interview with Bloomberg, Lagarde said:

“I think we have to distinguish between cryptos that are those highly speculative, suspicious occasionally, and high intensity in terms of energy consumption assets, but they’re not a currency. Cryptos are not currencies, full stop. Cryptos are highly speculative assets that claim their fame as currency, possibly, but they’re not. They are not.”

Altcoins have been in a massive bull run this season at a time when Bitcoin has been consolidating around $45,000. A majority of the top-ten altcoins have delivered in multiples of triple-digital gains over the last year.

On the other hand, Bitcoin (BTC) continues to dominate as the most valuable asset. Besides, it has witnessed massive adoption with countries like El Salvador making it its official currency.

ECB President Praises Stablecoin while Rejecting Bitcoin

Although rejecting Bitcoin and other altcoins, ECB President Christine Lagarde has a special affinity for stabelcoins and central bank digital currencies (CBDCs).

“You have these stablecoins that are starting to proliferate that are trying to nurture and push some big techs along the way that are a different beast and need to be regulated where there needs to be an oversight that is in line with the business they have actually conducting, regardless of what they call themselves,“ said Lagarde.

Government institutions across the world have accelerated their work on CBDCs. The ECB is not behind and is actively pursuing developments with the Digital Euro. These developments are largely in response to counter the market penetration by private players.

“And with all of that, there are the central banks, driven by customer demand to produce something that will make the central bank and central bank digital currencies fit for the century we are in. I was very interested in putting the CBDC issue on our agenda because I believe we have to be ready for it,” added Lagarde.

next