Christine Lagarde, president of the European Central Bank, criticized the role of bitcoin in “totally reprehensible” money laundering activities and says that cryptocurrency needs globally agreed regulations. The statements came during an interview at an online event organized by Reuters this Wednesday (13).
“For those who assumed that (bitcoin) could turn into a currency, I am very sorry, but this … is a highly speculative asset that has led to some deceptive business and some curious and totally reprehensible money laundering activities,” said the former director of the International Monetary Fund (IMF).
Bitcoin must be regulated at “global level”
The ECB president also believes that cryptocurrency needs rules established globally: “There have to be regulations, and this has to be applied and agreed on a global level, because if there is a loophole, that loophole will be taken advantage of”. Lagarde adds that for this category of regulation it requires “global cooperation and multilateral action are absolutely necessary”.
The discussion of cryptocurrencies to facilitate international money laundering is among the priorities of major regulatory bodies around the world. The US Financial Crimes Oversight Network (FinCEN) rightly proposes that institutions that deal with digital currencies be required to collect personal information from wallet owners.
The agency seeks to remove the anonymity present in most cryptocurrency transactions today. Criminals abuse the private and decentralized nature of digital assets to convert funds from illicit activities into digital currencies, and then again into cash. However, crypto advocates say that public ledgers registered on blockchain networks also allow funds to be tracked more easily than bank notes.
ECB makes consultation on “Euro Digital”
Lagarde also commented that about 8,000 people commented on a possible Euro Digital in a public consultation that ended on Tuesday (12). This would be the highest degree of interaction on the topic, as the ECB president points out. “We are moving forward, but it is an area where we need to be very careful”, he points out.
The interviewee also said that looking at China and the development of the country’s state digital currency, Lagarde concludes that it should still take “a long time to ensure that the system is secure”.