Christine Lagarde said that she does not consider Bitcoin as a currency at all, and even more so as a world reserve currency.
February 11, 2021 | AtoZ Markets – The head of the European Central Bank (ECB) believes that central banks around the world will not hold Bitcoin (BTC) anytime soon.
In a conference call with The Economist on February 10, Christine Lagarde was firmly averse to risk when it comes to decentralized cryptocurrencies.
Christine Lagarde: Bitcoin is out of the question
“It’s highly unlikely, I’d say it’s out of the question,” she replied when asked about the central bank’s adoption of Bitcoin. Lagarde has long mocked Bitcoin, which has exploded at a time when the ECB is printing huge amounts of liquidity in an attempt to shore up its financial jurisdiction after a year of government-imposed lockdowns.
Nonetheless, the ECB is “doing everything possible” to promote Bitcoin by accident, says “The Bitcoin Standard” best- selling author Saifedean Ammous.
He referenced another ECB event this week that signaled that consumers across the eurozone bloc could be dealing with negative interest rates for years to come.
Quoted by Bloomberg, a member of the executive board said that if the institution created a digital euro, it should charge people who refuse to spend it.
The reason, Fabio Panetta argued, is that if the euro area were to experience another financial crisis, consumers could drain their bank accounts and bank directly with the issuer of the digital euro.
“For example, in times of crisis it might be necessary to adjust the remuneration of the digital currency, but this could indicate that the central bank is anticipating financial stress, leading to self-fulfilling instability,” he added.
Making them pay
As such, to keep banks afloat, the digital euro should ironically punish those who try to avoid safeguarding their financial integrity.
According to Bloomberg, Panetta said that a 2% tax would be insufficient to stop a bank run and that the compensation he spoke of should be “highly penalizing.”
Perhaps unsurprisingly, his comments drew derision from Bitcoin advocates who have long enjoyed the ability to save without paying the privilege through negative interest rates.
“The ECB really goes out of its way to emphasize and publicize Bitcoin’s value proposition,” Ammous summarized.
It is not the first time that the central bank has inadvertently announced the benefits of using a currency that is not under its control.
As AtoZ Markets reported, various officials have exposed the euro’s unattractiveness as a financial proposition on multiple occasions. The digital euro is expected to be at least four years from now, far behind the experiments of China, which is already launching its digital yuan.
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