The governor of the European Central Bank, Christine Lagarde, said that Bitcoin is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activities.
This was reported by Reuters who had the opportunity to interview Lagarde during the Reuters Next conference.
Moreover, the ECB President has called for greater global regulation of Bitcoin, precisely to limit its use for money laundering activities.
Christine Lagarde on Bitcoin
While it is indeed correct to say that Bitcoin has sometimes been used for money laundering activities, it should also be added that most of these activities are still primarily carried out in euros, dollars, and other fiat currencies, in such a large proportion that there is an order of magnitude or even two of difference.
Moreover, the percentage of BTC trading volumes associated with criminal activity is minuscule, compared to that of licit activities, and probably lower than that for fiat currencies themselves, especially banknotes.
Another thing that should be added is that on-chain bitcoin transactions might be even more easily traceable than fiat currency transactions, although the future introduction of central bank digital currencies may well reverse this ratio.
To be fair, it is not at all unlikely that regulation on the use of bitcoin and cryptocurrencies will be tightened in the future, but since BTC is increasingly entering common use in the mainstream as well, it is even possible that such a dynamic could encourage rather than restrict its spread.
Given that the vast majority of BTC trading volumes are legitimate, more regulation could favour these, and only disfavour marginal uses for illicit activities.
So while Lagarde’s words have been interpreted by many as an attack on Bitcoin, they actually probably aren’t, though whether Lagarde is aware of this or not is unknown.
