European Central Bank President Christine Lagarde slammed Bitcoin on Tuesday in an interview with Reuters by calling it “highly speculative asset” that leads to "reprehensible activity, including money laundering."
“There has to be regulation," she said, "any loopholes need to be closed." She did not provide specific examples of money laundering cases but said she understood there had been criminal investigations into illegal activity.
"For those who had assumed that it might turn into a currency, I'm terribly sorry, but this is a highly speculative asset which has conducted some funny business and some interesting and totally reprehensible money-laundering activity,” she said in her scathing review of the world's number one cryptocurrency.
With the large decline in the dollar, negative yields, and continued policy uncertainty about coronavirus, investors have been looking for alternatives to traditional cash holdings. Like most innovation and fast price growth, the latest Bitcoin bull market will undoubtedly attract more institutional participation than ever before, and invite tighter regulation.
While critics say that instruments like Bitcoin make the illicit transfer of funds easier, crypto advocates say public blockchains actually allow money to be traced more easily than cash and can actually help law enforcement.
Lagarde is a French politician and lawyer serving as President of the European Central Bank since November 2019. Between July 2011 and September 2019, she served as Chair and Managing Director of the International Monetary Fund.
Lagarde suggested that it could take the Eurozone up to four years before it possibly launches a digital euro. She gave Facebook's Libra token as one example of why they aren't in a rush to deploy the e-euro.
Meanwhile, Bitcoin is up 240% in the last three months, up 324% in the last six month, and is trading at $38,500 at the time of writing. Bitcoin whales bought the dip at $30,000 and seem ready to ride the wave to $50,000.