European Central Bank (ECB) President Christine Lagarde says Bitcoin needs to be regulated at the international level, adding that Bitcoin is a highly speculative asset.
Speaking at a Reuters conference, the head of the European Central Bank said the largest cryptocurrency by market cap was “highly speculative”, and was being used for illegal activities.
“(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” Lagarde said.
Lagarde said she understood there had been criminal investigations into illegal activity, without elaborating on specific examples of money laundering cases.
After a meteoric rise of Bitcoin’s price in 2020, investors increasingly view Bitcoin as a store of value similar to gold, to shift some of their cash into Bitcoin to lessen the impact of depreciation, amid the economic stimulus from governments in the face of the pandemic downturn.
Having surged more than three-fold in 2020, Bitcoin rose to a record high of nearly $42,000 last week, but saw a recent sell-off. At the time of writing, Bitcoin is trading at $37,333 up 12.4% over the last 24 hours. Its price has risen 31% year-to-date.
Global Rules for Bitcoin
Lagarde stated that the ‘speculative’ Bitcoin needs global regulation: “There has to be regulation. This has to be applied and agreed upon … at a global level because if there is an escape that escape will be used,” said Lagarde.
Commenting on Bitcoin’s recent bull run, Lagarde said Bitcoin is a “speculative asset by any account”. “For those who had assumed that it might turn into a currency — terribly sorry, but this is an asset and it’s a highly speculative asset,” she added.
“Global cooperation, multilateral action is absolutely needed, whether it’s initiated by the G7, moved into the G20 and then enlarged. It’s something that needs to be addressed,” she said.
Lagarde has repeatedly called for regulation against Bitcoin. She joined a number of regulators from across the world in calling for implementing global rules for cryptocurrencies.
In China, trading of cryptocurrencies including Bitcoin, as well as financing through initial coin offerings (ICOs) have long been banned in mainland China. The government and regulator have been working to tighten scrutiny on illicit blockchain and cryptocurrency-related activities, while frequently dismissing the use and utility of the new asset class.
Earlier this month, China’s state media warned people to be skeptical of Bitcoin’s recent surge. A lengthy op-ed from the People’s Daily warned younger investors against leverage trading Bitcoin amid the latest bull run.