ECB President Christine Lagarde Says Crypto Should be Regulated

European Central Bank Governor Christine Lagarde said cryptocurrencies are "based on nothing" and should be regulated to discourage people from guessing them in savings.

Legarde told Dutch television that she is concerned about people “who have no understanding of the risks, who will lose it all and who will be terribly disappointed, which is why I believe that it should be regulated.”

The comment is in the midst of a turbulent era in the crypto market, as the digital currencies Bitcoin and Ether have fallen 50% from last year's peak. At the same time, the asset class is facing scrutiny from regulators concerned about the potential risks to the broader financial system.

Christine Lagarde said, “My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety.” 

Other ECB officials have already expressed concerns. One is board member Fabio Panetta, who said in April that crypto assets are "creating a new wild west," similar to the 2008 subprime mortgage crisis.

Lagarde said he does not own crypto assets because he "wants to practice what he preaches." However, she follows them "very carefully" because one of her sons invested against her advice. "He's a free man," she said.