The former Ripple consultant and current Federal Reserve Vice Chair for Supervision, Michael S. Barr, held a meeting with Christine Lagarde, the President of the European Central Bank (ECB).
This noteworthy encounter was revealed by Lagarde herself through a social media post. So, what really happened? Let’s dive in.
Lagarde Expresses Concern
Lagarde is a known critic of the burgeoning growth of cryptocurrencies, expressing worries over their potential to disrupt the traditional banking system. She opined last year that the expanding presence of digital assets could challenge the pivotal role of central banks as economic stabilizers, possibly leading us back to the free banking era.
Also Read: Crypto News: Experts Predict Banks Vanishing as Cryptocurrencies Gain Ground
Earlier this year, Lagarde emphasized that central banks risk losing their relevance if they don’t adapt to the growing momentum of central bank digital currencies (CBDCs). Lagarde underlined the perception of commercial banks regarding central banks as “monetary anchors,” stressing the importance for these institutions to remain germane in an evolving financial landscape that includes the rise of CBDCs.
Let’s Face It: Crypto Is Volatile.
Conversely, Barr recently drew attention to the potential hazards that volatility in crypto markets could pose to traditional banking. Nevertheless, he acknowledged that thanks to cautious regulatory supervision, the impact has been relatively limited so far. Barr, however, did not dismiss the possibility of banks participating in the crypto arena.
He suggested that regulators are actively working to understand how banking entities can safely and securely engage in the crypto sector. Furthermore, Barr recognized the potential for crypto technology to enhance the efficiency and cost-effectiveness of financial markets and payment systems.
Read More: Former Ripple Advisor Holds Discussion with ECB’s Lagarde