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Under fire crypto "worth nothing" says Lagarde

The president of the European Central Bank has been a long-standing critic of crypto and called them "highly speculative assets". Her criticism comes as calls increase for tighter regualation of the industry.

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The embattled crypto sector has taken a fresh knock, after the president of the European Central Bank Christine Lagarde said it’s “worth nothing” and has called on it to be regulated.

The broadside from Lagarde comes at a difficult time for the crypto market with the likes of bitcoin and ether plummeting over 5O per cent from last year’s peak while the industry is also facing pressure for more regulatory scrutiny.

"I have said all along the crypto assets are highly speculative, very risky assets," Lagarde told the Dutch television show College Tour.

“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.”

Lagarde said she was particularly concerned about those that could “lose it all” as don’t understand the risks of investing in digital currencies.

“That, she said, “is why I believe that that should be regulated.”

The politician, economist and lawyer said she had not invested in crypto herself, but that her son had but not with much luck.

Despite the attack from Lagarde, crypto is proving attractive for fintechs, with the likes of Moneybox and Chip moving into this area, or enhancing their crypto offering.

However, Lagarde was more upbeat about the prospect of a digital Euro.

She said: “The day when we have the central bank digital currency, any digital euro, I will guarantee it," she said. "So the central bank will be behind it. I think that is vastly different from any of those things."

Lagarde has long been circumspect about cryptocurrencies, whose popularity has surged amid low interest rates as investors are attracted by potentially big wins.

In the US, the treasury secretary and former fed chairman Janet Yellen called for new federal regulation over cryptocurrencies. 

Despite the crypto markets continuing to be volatile, crypto is fast becoming the next career move for fintech veterans.

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