The President of the European Central Bank Christine Lagarde once again passed a negative statement on the role of cryptocurrencies in the financial system.
Despite the high volatility nature of crypto assets, they can play an important role in the payment systems because the backend technology is better than the traditional centralized technology of Banks. Banking services providers are considering developing blockchain technology-based sovereign fiat currency, or Central Bank Digital Currency (CBDCs).
Recently Christine Lagarde, president of the European Central Bank & also popularly a crypto hater, said that increasing circulation & adoption of cryptocurrencies may cause a threat to the traditional banking system and indirectly asserted that it can bring a free Banking ecosystem.
The ECB president also said that Banking services needed to interfere in the financial services-related problems & needs, to maintain the leadership of the Bank’s role over the crypto sector.
According to Christine, if Banks will not play an important role then there are chances that the Crypto sector may replace traditional banking & financial services based on monetary systems.
“We central bankers have been operating as a monetary anchor concerning the commercial banks and the private money. If we are not in that game, if we are not involved in experimenting, innovating, or digital central bank money, we risk losing the role of anchor that we have played for many decades.” ECB president said.
Christiane also pointed toward the past economic crisis, when there was no Central Bank or any Monetary system and at that time people were free from any centralized Monetary framework.
“when the central bank monetary anchor was not there, precipitating crisis after crisis. That certainly was the case at the time of free banking in the 19th century. Do we want to go back to those days? Probably not.”
In the past, Christine also labeled all cryptocurrencies useless & said that crypto assets have no value because backed by nothing. She also said that there are no safety provisions or policies, which can ensure the safety of the investors.