Bitcoin and other crypto-assets have forever isolated conventional economists and bankers with some issuing caution about their volatility, while others lauding their originality. In this regard, crypto supporters see Christine Lagarde’s nomination as the ECB president as a favorable development.
Earlier in April, 63-year-old Christine Lagarde, who has just been shortlisted to succeed Mario Draghi as Chairman of the European Central Bank (ECB), cautioned that cryptos are “shaking the system”— a statment that reflects a shift in the ECB’s attitude to Bitcoin and crypto, and possibly encourage adoption.
Lagarde said
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system. We don’t want to shake the system so much that we would lose the stability that is needed.”
Lagarde warned the capability of cryptocurrencies in a 2017 interview, while stating that the core blockchain technology does not warrant rejection. The advocates of Bitcoin and cryptocurrency have primarily greeted the nomination of Lagarde to the ECB’s leadership role, with some believing her frankness to crypto to be great for sector.
In a note to clients, Mati Greenspan, senior market analyst at brokerage eToro, said “Several people have pointed out to me already is that the next ECB boss is incredibly crypto friendly. Indeed, Christine Lagarde who is set to replace Mario Draghi on 1 November is extremely pro digital assets.”
Greenspan explained why Lagarde is good for cryptocurrency sector:
“Not bitcoin, of course, but she has advocated already for state-backed cryptocurrencies as well as settlement tokens like XRP and JPM coin. We can expect that someone so crypto friendly in such a position will be good for the industry as a whole.”
Lagarde continues to have a distinct view of Bitcoin and crypto, compared to that of former ECB president Mario Draghi, who said previously this year that cryptocurrencies are “extremely dangerous” investments, dissociating the ECB and other central banks from exploration and responsibility of regulating cryptocurrencies.
Otherwise, the background of Lagarde as a politician has led some to envisage that she will pick a fundamentally different way to manage the ECB than her predecessors, who have all been historically economic experts over the 21-year history of the ECB.
As social media platform provider Facebook and Wall Street financial institutions such as JP Morgan venture into Bitcoin, blockchain and cryptocurrencies, organizations like the ECB will find it harder to discard them— and Lagarde could perhaps discover Bitcoin and crypto needs more focus than she believes.