Cryptocurrencies, including Bitcoin and Ethereum, have attracted significant attention and debate in recent years. According to European Central Bank (ECB) board member Fabio Panetta, digital assets hold “no societal benefits” and should be considered a form of gambling. In a speech at the Bank for International Settlements (BIS), Panetta argued that cryptocurrencies fail to serve any meaningful purpose in society and lack intrinsic value, as they are not backed by a central authority or institution.
This absence of backing also means that cryptocurrencies lack trust, making them “inherently highly volatile and unsuitable as a means of payment.” Panetta further highlighted the link between crypto and gambling, warning that the instability of unbacked cryptocurrencies makes them appealing for gambling purposes, which is essentially what centralized crypto exchanges facilitate.
Instead of offering support to the cryptocurrency industry, Panetta believes that policymakers worldwide should treat it as a form of gambling and subject it to stringent regulatory standards that address its social costs. He added that unregulated crypto could eventually pose a threat to global financial stability, emphasizing the importance of regulation.
To avoid such threats, Panetta suggested that all crypto-related activities, including decentralized finance (DeFi) and self-custodial wallets, should be regulated. He acknowledged the ongoing efforts in the European Union, such as the new MiCA regulations, but insisted that there is more work to be done. Furthermore, the ECB executive underlined that regulating crypto should not be seen as a way to legitimize it, but rather to apply the principle of “same activity, same risk, same regulation,” while ensuring that investors are fully aware of the risks involved.
Despite Panetta’s view that cryptocurrencies hold no societal benefits, others believe that the technology has the potential to revolutionize finance, reduce transaction costs, and increase accessibility to financial services. Nonetheless, the growing interest in cryptocurrencies has undoubtedly led to increased scrutiny from regulators and the need to strike a balance between innovation and addressing the potential dangers associated with digital assets.
In conclusion, while cryptocurrencies undoubtedly have their detractors, the debate surrounding them underscores the increasing importance of finding a way to balance the potential benefits these digital assets can offer with the need for appropriate regulation and oversight. As crypto markets continue to evolve, it remains to be seen how regulators and policymakers will navigate these complex issues and what the future holds for the world of digital assets.
Source: Cryptonews
