European Central Bank (ECB) President Christine Lagarde has reiterated her skeptical stance on cryptocurrencies, citing her son’s financial setbacks in the crypto market as a cautionary example. Speaking to students in Frankfurt, Lagarde disclosed that her son experienced substantial losses, nearly wiping out his crypto investments, despite her earlier warnings against such ventures.
Lagarde has been a vocal critic of cryptocurrencies, asserting in May 2022 that these digital assets are essentially “worth nothing” and lack a solid foundation. Under her leadership, the ECB embarked on the initiative to introduce the Central Bank Digital Currency (CBDC) known as the Digital Euro, aiming to counter the growing influence of virtual assets.
Discussing her son’s crypto misfortunes, Lagarde noted that while the losses were not catastrophic, they amounted to approximately a 60% decrease in his investment portfolio. She emphasized that, despite initially dismissing her advice, her son eventually acknowledged the risks associated with cryptocurrencies, leading to an admission that “I was right.” Lagarde expressed her disapproval of cryptocurrencies, stating,
“My perspective on cryptos is quite negative. While individuals have the freedom to invest and speculate, they should not have the liberty to engage in activities that are subject to criminal sanctions.”
In 2021, Lagarde expressed strong reservations about Bitcoin’s dominance, contending that central banks were unlikely to adopt Bitcoin in the foreseeable future. Although Lagarde believed that the introduction of CBDCs could counteract the growing popularity of cryptocurrencies, the ECB has not taken further steps towards the realization of the Digital Euro as an alternative to digital assets. The ECB stated, “After two years, the Governing Council will decide whether to advance to the next stage of preparations, potentially paving the way for the issuance and rollout of a digital euro in the future.”