Christine Lagarde: A separate law is needed to regulate crypto lending

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The head of the European Central Bank (ECB) spoke before the European Parliament, where she expressed her conviction in the need for more careful control over the crypto market against the backdrop of impending inflation.

Christine Lagarde is convinced that crypto lending requires separate regulatory norms.

The ECB's attention was drawn to the procedure available in Proof-of-Stake (PoS) protocols, which allowsMultiple crypto token holders pool assets by granting the staking pool operator validator status and rewarding all participants with tokens for their computing resources.

According to Lagarde, the field of lending to crypto assets is becoming more and more popular.The official suggests that the trend requires additional efforts on the part of the European Union.Lagarde believes that the EU needs to create MiCa 2 – a second, separate from theof the main, regulatory package that would regulate staking:

"Innovation in this unexplored segment of the crypto market has the potential to put consumers at risk.The lack of regulation will definitely lead to an increase in fraud, speculation and criminal transactions."

Separately, the official mentioned decentralized finance (DeFi), which, in her opinion, also representsa real risk to financial stability and therefore also need a separate regulatory framework.

Earlier, the ECB stated that the high correlation between the cryptocurrency and stock markets will no longer allow diversifying the investment portfolio with digital assets.