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DeFi May Pose "Real Threat" to Financial Stability, Says ECB's Christine Lagarde

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Tue, 06/21/2022 - 19:03
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Alex Dovbnya
ECB's Christine Lagarde wants to regulate cryptocurrency staking and lending
DeFi May Pose "Real Threat" to Financial Stability, Says ECB's Christine Lagarde
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European Central Bank President Christine Lagarde has recently opined that cryptocurrency assets and decentralized finance may potentially pose a real risk to financial stability.

This could happen if cryptocurrencies start playing a bigger role in the broader economy, according to Lagarde.

As of now, the links between crypto and legacy finance are still limited, the central banker says.

The ECB supports the quick adoption of the Markets in Crypto-Assets (MiCA) framework. The comprehensive regulatory framework is expected to take effect in 2024.

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Lagarde said that MiCA II, a new iteration of the regulatory regime, could potentially cover cryptocurrency staking and lending.

Cryptocurrency lending is currently facing severe scrutiny following the downfall of Celsius. As reported by U.Today, the troubled crypto lender halted withdrawals on June 13, and it is yet to resume them, asking customers for more time.

As reported by U.Today, Lagarde said that cryptocurrencies were worthless last month.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.