ECB’s Christine Lagarde: Central Banks Holding Bitcoin is Out of the Question

The possibilities of central banks holding bitcoin in the future are “out of the question,” asserted the President of ECB Christine Lagarde.

At the same time, US Secretary Janet Yellen warned about the growing risks of digital assets used in illegal activities but believes that they could have a vital role ultimately.

Lagarde Skeptical On BTC Adoption From Central Banks

With bitcoin’s rise to the mainstream stage after several large corporations and institutional investors bought some for their balance sheets, the question arose within the community if central banks will even follow this example.

However, the President of the European Central Bank (ECB), Christine Lagarde doesn’t see such a future for the primary cryptocurrency.

During a conference call hosted by The Economist and cited by BusinessInsider, she asserted that this possibility is “very unlikely – I would say it’s out of the question.”

She doubled-down on her criticism against BTC as “it’s not a real currency.” Nevertheless, she believes that a digital currency could have a bright future but wouldn’t be bitcoin.

Instead, she noted that the COVID-19 pandemic highlighted the merits of money existing and transmitted only in the online space.

The ECB has been dabbling with the idea of developing and launching its own central bank digital currency (CBDC) for over a year. Lagarde said in late 2020 that if the bank indeed proceeds with the digital euro, it would have a complementary role.

Christine Lagarde. Source: Reuters

Risk Explosion Of Criminals Using Digital Tech

The recently-appointed US Treasury Secretary Janet Yellen issued warnings on the possible “explosion of risk” from criminals employing digital currencies and technology for illegal activities.

“As the pandemic has moved more of life online, crime has moved with it. We’re seeing more – and more sophisticated – cyberattacks aimed at institutions that hold up our society: hospitals, schools, banks, and even our government.” – she told a US Treasury roundtable.

However, she seemed more optimistic on cryptocurrencies’ potential role in the global monetary system if they manage to escape the realm of illegal usage:

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

Although some reports have indeed noted that digital assets have been used by terrorist organizations or other illicit activities, numerous others showed that criminals had turned significantly more often to cash.

Featured Image Courtesy of BBC

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