Christine Lagarde, President of the European Central Bank (ECB), has announced the need to regulate the crypto lending sector during a speech to the European Parliament.
She has drawn attention to the growing activity of crypto lending platforms, a trend that requires additional regulatory efforts by the authorities.
Lagarde has referred to the cryptocurrency regulation bill (MiCA) adopted by the European Committee of the Regions (ECON) in March.
According to her, due to current developments in the sector, there is a need for “MiCa II” to oversee the holding and lending of digital assets.
Lagarde has said:
“Innovation in these uncharted and unexplored territories exposes consumers to risk, where the lack of regulation often leads to fraud, totally illegal valuation claims and, very often, speculation.”
Lagarde has added that decentralized finance represents “a real risk to financial stability.”