ECB’s President Opines That Central Banks Are Unlikely To Hold Bitcoin
The European Central Bank’s president, Christine Lagarde, continues to share her opinion concerning cryptocurrencies, as she had previously done regarding blockchain technology. The head had called the asset ‘speculative’ at a point, making it unsuitable as a security. Many opinions have gone round concerning the unexpected boom of Bitcoin, and some opined that central banks would hold the digital assets.
The president revealed her present stance through a press conference, where she said that central banks holding Bitcoin is out of the question. In the past, Lagarde had shown that she has no interest in promoting or advocating for the digital asset’s use, primarily the reason behind the talks on the digital Euro.
How the pandemic contributed to the digital Euro’s creation
The global pandemic brought many changes around the world, from people adapting to a lifestyle change to others going into digital asset investments to withstand the failing economy. Another change the pandemic brought is the immense success of cryptocurrencies like Bitcoin and Ethereum.
Many investors, both retail and institutional, invested in the popular cryptocurrencies, which help the asset gain some dominance globally. Today, Ethereum and Bitcoin are far larger than their value before the health crisis, stopping major economic activities. The sudden success of digital assets made countries decide on creating national digital currencies also.
The president said the crisis contributed to talks on the Euro, which she revealed would be ready within the next four years. Other countries contributing to the Central Bank Digital currency trend would be China, with its plans to make Yuan global as it now takes on a digital form. The country assured that the currency would help countries make faster payments around the globe.
Presently, the Asian country has some trials on its digital currency, with major cities like Shanghai. Lagarde clarified that the digital Euro would not replace cash but complement it in various ways while adding that it can replace private cryptos like Bitcoin.
Lagarde’s past opinion on cryptocurrencies
The president, who took the position around 2019, has never been a fan of private cryptocurrencies. Lagarde had said the asset contributes to illegal activities like money laundering, leading to the world’s agitation for the crypto’s regulation.
Many world leaders share this opinion due to blockchain’s decentralized nature, making it hard to trace or get information on digital asset holders. Now things are changing with governments standing against anonymity by enforcing know-your-customer requirements.
She said that holding the digital asset comes with a lot of risks while adding that it cannot function as money. Other digital assets like stablecoins also stand against the leader’s opinion, as she said she has some concerns regarding stablecoins.
However, the expert has added that the digital Euro, which the EU is working towards, would create jobs and take on essential roles. Presently, the Central bank is studying and understanding CBDC and its possible benefits to the public. The EU would essentially commence the currency’s creation once the research is over.
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