DeFi could pose a “real threat” to financial stability, says ECB’s Christine Lagarde

Alex Dovbnya

ECB’s Christine Lagarde Wants to Regulate Cryptocurrency Strike and Lending

President of the European Central Bank, Christine Lagarde recently reviewed that cryptocurrency assets and decentralized finance may pose a real risk to financial stability.

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

At the moment, links between crypto and legacy finance are still limited, the central banker says.

The ECB supports the rapid adoption of the Markets in Crypto-Assets (MiCA) framework. The comprehensive regulatory framework is expected to come into force in 2024.

Lagarde said MiCA II, a new version of the regulatory regime, may be able to cover cryptocurrency lending and lending.

Lending to cryptocurrencies is currently tightly controlled following the fall of Celsius. As reported by U.Today, the troubled cryptocurrency lender halted withdrawals on June 13, and it has yet to resume them, asking customers for more time.

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

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