Fabio Panetta, Executive Committee of the European Commission A member of the Central Bank (ECB) believes that unbacked cryptocurrency assets are gambling vehicles with no intrinsic value and require regulation. In his opinion, Panetta said that while crypto regulation is a good solution to the problem, it also has to address decentralized financial structures.
ECB executive member Fabio Panetta believes cryptocurrencies should face regulation like gambling
European Central Bank (ECB) enforcement Commission member Fabio Panetta believes that cryptocurrencies masquerading as investment assets are akin to gambling vehicles. As part of a opinion published on on January 4, Panetta argued that unbacked virtual currencies should be regulated more like gambling devices than currency. I’m here.
Regarding cryptocurrencies, he said:
They are speculative assets. Investors buy them with the sole purpose of selling them at a higher price. In fact, they are gambling disguised as investment assets.
As gambling elements, they have no “intrinsic value” and are likely to cease to exist if left alone, even if they are rarely used as a payment method, Panetta explains. To do.
Decentralized finance needs oversight
2022 saw the demise of the Terra ecosystem and the bankruptcy of his FTX, one of the largest cryptocurrency exchanges. A series of negative incidents give Panetta’s opinion a boost. For him, the level of interconnection that cryptocurrencies are currently seeing with traditional finance makes it impossible for cryptocurrencies to remain unregulated. Panetta explained:
Cryptocurrencies cannot afford to remain unregulated. Guardrails that address regulatory gaps and arbitrage must be built to address the significant social costs of cryptocurrencies head-on.
According to Panetta, this next wave of regulation should not only view cryptocurrencies as gambling instruments, but also tax them according to the “cost” they impose on society. Panetta also addressed decentralized finance, pointing out the need for regulation in this area, mentioning crypto lending and non-custodial wallet services. Finally, Panetta supports the creation of a Central Bank Digital Currency (CBDC) to address the shortcomings of cryptocurrencies and preserve the central bank role.
Europe is currently in the final stages of adopting its own cryptocurrency regulatory framework, called MiCA (Markets in Crypto Assets), and is also considering issuing the digital equivalent of fiat currency, the Euro. I’m here.
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