Global Central Banks Weigh In on Cryptocurrency Value and Regulation

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In recent weeks, central bankers and financial regulators across the globe have intensified their public commentary on the role, value, and risks associated with cryptocurrencies. From Davos to New Delhi, policymakers are drawing clear distinctions between digital assets and sovereign currencies, emphasizing regulatory oversight, financial stability, and consumer protection. While perspectives vary, a common thread emerges: cryptocurrencies are increasingly treated as speculative assets rather than legitimate money, with calls for stronger, coordinated global regulation.

This growing consensus reflects the maturation of the digital asset ecosystem—and the urgency with which traditional financial institutions are responding to its expansion.

Cryptocurrency as Asset, Not Currency

A clear majority of advanced economies—including those in Europe and North America—now recognize cryptocurrencies like Bitcoin as financial assets rather than legal tender. This distinction is critical: it shifts the regulatory focus from outright bans to structured oversight.

At the World Economic Forum in Davos, IMF Managing Director Kristalina Georgieva issued a stark warning:

“Do not confuse crypto products with currency.”

She emphasized that while any asset without sovereign backing can form a new asset class, it cannot function as money. Money requires trust, stability, and institutional accountability—none of which decentralized cryptocurrencies inherently possess.

Echoing this sentiment, European Central Bank (ECB) President Christine Lagarde stated plainly that crypto assets are highly speculative and extremely dangerous. In her assessment, they “have no intrinsic value” and lack any underlying asset to serve as a reliable anchor. Her position underscores the ECB’s broader stance: while digital innovation should not be stifled, it must operate within robust regulatory boundaries.

👉 Discover how global financial leaders are shaping the future of digital assets.

Regulatory Frameworks Over Bans

Rather than imposing prohibitions, many central banks are prioritizing the development of comprehensive regulatory frameworks. The goal is not to eliminate crypto activity but to contain systemic risk, protect investors, and ensure interoperability across jurisdictions.

French Central Bank Governor François Villeroy de Galhau reinforced this view:

“I have always seen crypto as an asset, not a currency. For any currency to function, there must be someone accountable. That’s absent in so-called cryptocurrencies.”

He also highlighted the dangers of unregulated "stablecoins," which he described as misnamed and potentially destabilizing if allowed to fragment the financial system along private lines. Without consistent cross-border supervision, he warned, these assets could undermine confidence in national monetary systems.

ECB Executive Board member Fabio Panetta added that due to their volatility and opacity, cryptocurrencies cannot serve as reliable payment instruments. He stressed that public money—especially central bank digital currencies (CBDCs)—must remain the anchor of monetary stability in the digital age.

Similarly, Bank of England Deputy Governor Jon Cunliffe noted that while crypto is currently seen as a risk asset, it has not yet reached systemic levels. However, he cautioned that shifts in investor behavior—especially during periods of quantitative tightening—could trigger rapid outflows and erode market confidence. Retail investors, often lacking technical understanding, are particularly vulnerable.

Thailand’s central bank has also maintained its position: it does not support using cryptocurrency as a payment method, citing volatility and fraud risks.

Proactive Regulation Gains Momentum

Recognizing the pace of innovation, several nations are adopting forward-looking regulatory strategies.

Since January 2022, the U.S. Congress has introduced over 80 bills related to digital assets, blockchain technology, and central bank digital currencies (CBDCs). These legislative efforts span six key areas:

This legislative surge signals a shift toward formal integration of digital assets into the financial system—with guardrails.

In Europe, Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, urged swift action:

“We need proactive and forward-looking regulation before these markets grow too large.”

While crypto assets currently represent only about 1% of global financial assets, their rapid growth poses potential threats to individual banks and overall financial stability. DeFi (decentralized finance) platforms, in particular, operate outside traditional oversight, increasing counterparty and liquidity risks.

Cyprus is moving ahead independently, preparing its own crypto asset legislation even before the EU finalizes a unified framework. Norway’s central bank has similarly called for improved regulation of crypto services to safeguard consumers and market integrity.

👉 Explore how emerging regulations are redefining the crypto landscape worldwide.

Countries Taking a Harder Line

Despite growing acceptance in some regions, others are tightening restrictions or enforcing outright rejection.

Argentina’s central bank (BCRA) recently banned domestic banks from offering crypto services, citing risks to financial users and systemic stability. Since digital assets fall outside existing regulatory frameworks in Argentina, this move effectively amounts to a de facto prohibition.

Sri Lanka’s central bank governor confirmed on May 23 that the country does not recognize cryptocurrencies at all. Jamaica’s central bank governor, Richard Byles, stated bluntly: “We are staying away from crypto.” Kenya has gone further—its central bank warned that financial institutions supporting crypto trading may lose their licenses.

In the UK, former Bank of England Governor Andrew Bailey reiterated that Bitcoin has no intrinsic value and is not a practical payment tool. While it may hold extrinsic value as a store of wealth—driven by market demand—he doubts its long-term utility. That said, Bailey acknowledged the promise of blockchain and distributed ledger technology (DLT), which he believes merit serious consideration.

India’s stance remains cautious. Central Bank Governor Shaktikanta Das has repeatedly stated that cryptocurrencies lack underlying value and could “seriously disrupt” India’s financial system. He points to recent market corrections as validation of his skepticism. Importantly, he confirmed alignment between the Reserve Bank of India and the national government on this issue.

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Core Keywords

Frequently Asked Questions

Q: Do central banks consider Bitcoin real money?
A: No. Most central banks view Bitcoin as a speculative asset rather than legal tender. It lacks stability, intrinsic value, and institutional backing required for use as currency.

Q: Why are governments regulating instead of banning crypto?
A: Regulation allows oversight of risks—like fraud and money laundering—while enabling innovation. Bans are difficult to enforce and may push activity underground.

Q: Can cryptocurrencies be used for everyday payments?
A: Currently, most central banks say no. High volatility and slow transaction speeds make them impractical compared to traditional payment systems.

Q: What is the difference between CBDCs and cryptocurrencies?
A: CBDCs are state-issued digital currencies backed by central banks. Cryptocurrencies are decentralized and not guaranteed by any government or institution.

Q: Are stablecoins really stable?
A: Not always. Despite their name, some stablecoins have lost their peg during market stress, revealing hidden risks in their reserves and governance.

Q: Is blockchain technology supported by central banks?
A: Yes. While skeptical of cryptocurrencies, many central banks acknowledge the potential of blockchain and DLT for improving settlement systems and financial transparency.