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Since she was appointed the president of the European Central Bank, Christine Lagarde has advocated for a digital euro to complement technological advancement, especially in the payment industry.
Speaking at the Reuters Online event on Wednesday, European Central Bank (ECB) President Christine Lagarde highlighted her thoughts on the crypto space and the digital payment system. According to Lagarde, Bitcoin is a very volatile asset that has facilitated ‘funny business’. She also noted that Bitcoin needs regulation.
In addition, Lagarde noted that the bank under her leadership is working on developing a digital euro in five years.
Previously, Lagarde has been quoted as very skeptical, mostly with the stablecoin industry more than the rest of the crypto market. According to her, the stablecoin industry is likely to disrupt the banking industry in a huge way, thus proper regulation is needed. “Using stablecoins as a store of value could trigger a large shift of bank deposits to stablecoins, which may have an impact on banks’ operations and the transmission of monetary policy,” Lagarde said in one of her prior articles on digital assets.
Christine Lagarde and Her Stance on Bitcoin and Crypto Market in General
Since her appointment as the president of the European Central Bank, Christine Lagarde has advocated for a digital euro to complement technological advancement especially in the payment industry.
It is not yet clear on the regulations that Lagarde could propose on Bitcoin and the larger crypto market. However, any move towards a similar path as China would be a huge blow for the crypto industry. China banned the trading of digital assets in the country but still remains one of the largest controllers of Bitcoin by mining power.
Bitcoin market value is said to be derived from the market demand and more importantly the speculation both by retail and institutional investors.
Notably, some have argued that digital currency backed by global central banks could significantly benefit the crypto industry in a huge way. Apparently, global digital currencies that are interoperable could complement the digital assets by facilitating easy exchange.
Lagarde’s comments on Bitcoin coincides with increased volatility in the crypto space. Bitcoin in the past few days has dropped from an all-time high of around $41k to trade lows of around $30k. However, the asset has been consolidating around $35 in the past two days. The asset was trading around $34,620 at the time of writing according to metrics provided by CoinGecko. It had dropped approximately 2.5% in the past 24-hours.
Bitcoin had a market cap of around $640 billion with a daily trading volume of approximately $76.2 billion according to Coinmarketcap.
On the other hand, the top stablecoin by market cap Tether had a market capitalization of around $23.9 billion with a daily trading volume of approximately $97 billion.