Former International Monetary Fund (IMF) managing director and current European Central Bank (ECB) president Christine Lagarde is calling for multi-lateral action on a global scale to discourage criminals from trying to launder money with Bitcoin.
In a new conference with Reuters, Lagarde calls the world’s largest digital asset a “highly speculative asset” that has facilitated nefarious activities in the past.
“It is a speculative asset, by any account. If you look at the most recent developments upward, and now the most recent downward trend. 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, which has conducted some funny business and some interesting and totally reprehensible money laundering activity…
There has to be regulations and this has to be applied and agreed upon. This is a matter that has to be agreed upon at a global level. If there is an escape, that escape will be used. If anything it shows that global cooperation and multi-lateral action is absolutely needed, whether it is initiated by the G7, or the G20.”
A 2020 research report written by British defense and aerospace company BAE Systems on behalf of SWIFT found that criminals may be attracted to privacy features of some crypto assets.
However, to date, criminals prefer to use use cash for money laundering far more than Bitcoin and cryptocurrency.
“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods.”
Late last year, Lagarde addressed the advent of digital stablecoins, which are designed to be pegged to traditional assets. While they have the potential to drive innovation, she says they must be closely analyzed to ensure they do not threaten the EU’s monetary sovereignty.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/GeoArt