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

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

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ECB’s Christine Lagarde wants to regulate cryptocurrency staking and lending

European Central Bank President Christine Lagarde recently commented Cryptocurrency assets and decentralized finance can potentially pose a real risk to financial stability.

According to Lagarde, this could happen when cryptocurrencies begin to play a bigger role in the broader economy.

The central banker says that as of now, the relationship between crypto and legacy finance is still limited.

The ECB supports the rapid adoption of markets in the crypto-assets (MICA) framework. The comprehensive regulatory framework is expected to take effect in 2024.

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

Cryptocurrency lending is currently facing serious scrutiny following the fall of Celsius. As reported by U.Today, the troubled crypto lender halted withdrawals on June 13, and is yet to resume them, seeking more time from customers.

as Reported by U.TodayLagarde said the cryptocurrency was worthless last month.

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

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