ECB's Lagarde Disses Bitcoin as 'Speculative', Euro's Purchasing Power Plummets
Christine Lagarde, head of the European Central Bank (ECB), has publicly labelled Bitcoin price a 'speculative asset', stating it lacks intrinsic value and has no role as a currency. This comes as the Euro's purchasing power has plummeted by over 40% since 2002, raising questions about public confidence in traditional currencies.
Lagarde's comments highlight the ECB's stance on cryptocurrencies, which it sees as a threat to financial stability due to their lack of legal tender status. She placed Bitcoin firmly in the realm of speculation, noting that it relies more on market expectations than as a safe means of preserving value.
Meanwhile, the Euro's sharp decline in purchasing power over the past two decades has eroded household savings and public trust in the currency. Inflation pressures are rising, potentially driving more people towards decentralized assets like Bitcoin. If the Euro weakens further, this shift in public confidence could accelerate.
The ECB is not standing still. It is developing its own digital euro, a central bank digital currency (CBDC), with a planned launch around mid-2029. ECB Executive Board member Piero Cipollone estimates the project's timeline will be shaped by discussions among EU member states and legislative progress in the European Parliament. The ECB's decision on adapting to digital assets could significantly influence the future balance of the global financial system.
As the Euro's purchasing power continues to decline, public confidence may shift more towards Bitcoin and other decentralized assets. The ECB's stance on Bitcoin and its ongoing digital euro project will shape the future of European finance. Central banks worldwide grapple with maintaining control over liquidity and inflation as Bitcoin's adoption grows, making this a critical area to watch.
