Christine Lagarde has advocated regulating cryptocurrencies to discourage people from speculating on them with their savings.
In an interview with Dutch television, the President of the European Central Bank said she was worried about people "who don't understand the risks, who will lose everything and be terribly disappointed, so I think this should be regulated".
Bitcoin and Ether are down 50 percent from last year’s highs following the recent turmoil in the digital currency market.
Regulators are increasing their scrutiny of the sector amid concerns that it could pose threats to the broader financial system.
Lagarde expressed skepticism about the value of cryptocurrencies.
"My very sober view is that cryptocurrencies are worth nothing, are based on nothing, have no underlying asset to act as an anchor of security."
Waiting for the digital euro
The digital euro planned by the central bank is completely different.
"The day we release the central bank digital currency, a digital euro, I will guarantee that the central bank is behind it, and I think it's very different from a lot of those things," Lagarde said.
In April, ECB Director Fabio Panetta said crypto assets are creating “a new Wild West,” drawing parallels to the 2008 subprime mortgage crisis.
Lagarde said that she doesn't own any crypto assets herself because "what I preach is what I want to practice."
However, she is following developments "very carefully" because one of her sons has invested - against her advice.
"He's a free man," she said.Keywords: