ECB president says stablecoins are assets – not currencies – Ne Sept 03

Christine Lagarde, President of the European Central Bank (ECB), mentioned all cryptocurrencies, to which she consists of stablecoins and speculative assets, are “no currencies at all.”

In an interview with World Economic Forum founder and chairman of the board, Klaus Schwab, on September 1, Lagarde mentioned that cryptocurrencies “present themselves as currencies”; however, they nonetheless consider that assets are managed and “monitored by asset management authorities” need to. According to this definition, the ECB President has additionally declared Fiat-denominated digital currencies as assets.

“Stablecoin pretends to be a coin, but in reality, it is completely tied to an actual currency,” Lagarde mentioned. “For example, some of them say they can be used for transactions, but the value is precisely matched to the dollar.”

She added that the tasks behind issuing stablecoins ought to be required to repay their assets solely in fiat:

“It needs to be examined, monitored, and controlled so that buyers and customers of those units can make sure that they are being misrepresented. I feel the current historical past has proven that these reserve cash are not at all times as available and as liquid as they have been meant. “

Lagarde may be referring to Tether, the largest issuer of stablecoins by market capitalization. The company recently agreed to pay $ 18.5 million in damages under an agreement with the New York Attorney General alleging that the stablecoin issuer misrepresented the extent to which its USDT token is backed by fiat. And will submit regular reports on its reserves of security through 2023.

Related: Pandemic Accelerated Digital Currency Adoption: ECB President

However, despite these seemingly strong opinions on digital assets, Lagarde has made it clear that the ECB intends to act on its customers. She had previously criticized stablecoins and cryptocurrencies but did not rule out the ECB’s possibility of introducing a digital central bank currency. In July, the Governing Board of the ECB announced that it would start the investigation phase of a two-year digital euro project.

“If clients would somewhat use digital currencies than have paper cash and money available, it ought to be out there,” said Lagarde. “We ought to meet this want and have a Europe-based resolution that can be utilized as a way of fee safely, simply, and on pleasant phrases.”