The present of the European Central Bank claimed that all crypto assets are pretending to be a currency but in actual they are not.
In the World Economic Forum interview on 1 September, Christine Lagarde, said that all the Cryptocurrency in the crypto market are only assets.
According to Lagarde, All the crypto assets show their appearance like a currency. Even she consider all the stable coins in the asset class.
All the stable coins are under the assets category so they should be supervised by asset regulators.
“Stablecoins are pretending to be a coin, but in fact it’s completely associated with an actual currency,” said Lagarde. “For instance, some of them are saying that they can be used for transactions, but the value will be exactly aligned to the dollar.”
She also said that all the companies should back their stablecoin with the fiat currency fully.
“That needs to be checked, supervised, regulated so that consumers and users of those devices can actually be guaranteed against eventual misrepresentation. I think very recent history has shown that those reserve currencies were not always available and as liquid as they were intended to be.”
Here, Lagarde probably tried to take the reference of Tether, which agreed to pay $18.5 million against the damages and submit to periodic reporting of their reserves till 2023. The amount that Tether will pay will be a part of the settlement with the Office of the New York Attorney General.