The European Central Bank (ECB) president generated buzz in the crypto community and the wider financial market when she weighed in on the debates about the need to set up a strategic crypto reserve.
The United States and other interested countries are looking at Bitcoin as the perfect asset for their reserves, and there have been talks about other digital assets making the list. However, recent comments by ECB President Christine Lagarde are making waves.
In her statement, Lagarde rejected the idea of incorporating Bitcoin into the European reserves, listing factors like volatility and its association with money laundering.
The comments came after the Czech National Bank Governor Ales Michl announced that the bank is considering adding Bitcoin to represent 5% of its reserves. While Lagarde has been vehemently against Bitcoin, an old video shared by crypto influencer Amelia surfaced, where the ECB president hailed distributed ledger technology (DLT), while drumming its implications for the financial markets.
ECB president reveals stance on DLT
In the video posted by user Amelie on X, Lagarde talked about the technologies utilizing the DLT, noting that they are “clearly shaking the system.”
The video contrasts with her current stance concerning Bitcoin and her belief that it will not be incorporated into the EU reserves. In the video that was recorded in 2019, Christine Lagarde discussed extensively the financial disruptors that are using DLT.
Lagarde mentioned at the time that there were two key players in the space, listing incumbent banks and disruptors. She added that the disruptors are actively shaping the traditional banking landscape. “We just heard a very large systemic bank here saying that they’re launching the digital coin, currently piloted in a way within the institutional clients, but to be scaled beyond that,” Lagarde said.
She also referenced the TARGET Instant Payment Settlement (TIPS) launched by the bank in 2018 to facilitate low-cost, instant transactions between European banks. However, she added that DLT is clearly shaking the system. “Anything that is using distributed ledger technology, whether you call it crypto assets, currencies, or whatever, and it’s far from the Bitcoins that we used to talk about a year ago, that is clearly shaking the system,” she added.
Lagarde’s view on Bitcoin and implications for XRP
With Lagarde’s current stance on Bitcoin and the potential exclusion of the asset from the EU reserves, it is clear that the ECB president believes that the real disruptive technology was not Bitcoin.
This means that she views other assets built on the distributed ledger technology as better. Meanwhile, XRP supporters and the wider crypto community are interpreting the DLT comments to mean that she is backing XRP as the future of finance.
According to a user on X, the ECB president’s statement was very clear, and it means that XRP is the future. “Exactly! Christine Lagarde’s 2019 statement made it clear: the real disruption isn’t Bitcoin—it’s the power of distributed ledger technology, and #XRP is at the forefront of that revolution. The future is clear, and it’s #XRP, not BTC!,” the user said.
With the 2019 video and Lagarde’s current stance making the rounds, there has been a debate about which digital assets are better equipped for the financial systems of the future. While the ECB is yet to pick out digital assets in its crypto reserve, its president’s comments might push towards a DLT-based token, with XRP currently in the lead in that aspect. The token is good for financial institutional use due to its low-cost, cross-border abilities. While Bitcoin has been chalked off the list, DLT-based solutions are about to become the next big thing.
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