A board member of the European Central Bank (ECB), Fabio Panetta, has stated his opinion that cryptocurrencies should be seen as a kind of gambling rather than a valued asset class since they “offer no societal benefits.” Speaking at the Bank for International Settlements’ (BIS) Annual Conference, Panetta emphasized the fact that cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) serve no useful use.
Panetta stressed that the absence of support from a central authority or organization causes digital assets to lack inherent worth, which, in turn, erodes confidence in their stability. He said that because of their inherent volatility, cryptocurrencies are unsuited as a trustworthy form of payment. The board member spoke to the audience in Basel, Switzerland, and said these things.
Panetta said that the volatility of unbacked cryptocurrencies made them alluring for gambling purposes, drawing a comparison between the dangers involved in gambling and the characteristics of cryptocurrencies. He further said that these gambling-like behaviors have been made possible by centralized crypto exchanges.
Panetta said that cryptocurrency should be classified as a kind of gambling and be subject to strict regulation norms across the board. He stressed the necessity for strict rules to address the societal costs connected with the sector.
The ECB board member also issued a warning that the crypto industry may expand to a magnitude that endangers financial stability in the absence of adequate regulation. He emphasized the need for internationally coordinated legislation to guarantee that all cryptocurrency-related activities, such as self-custodial wallets and decentralized finance (DeFi), are governed by laws. While noting that the upcoming MiCA laws represent a step forward for the European Union (EU), Panetta emphasized the necessity for further work in this area.
Panetta emphasized that the goal of cryptocurrency regulation is to reduce risks, not to legitimize cryptocurrencies. To achieve uniformity and openness, he highlighted the adoption of the “same activity, same risk, same regulation” premise. Panetta emphasized the need of knowing all the hazards involved with investing in cryptocurrencies for investors.
In conclusion, Fabio Panetta, a board member of the European Central Bank, said that cryptocurrencies should be seen as a type of gambling and that they provide no social advantages. To address the dangers and societal costs related to the industry, he urged for thorough regulatory requirements. Panetta noted the continuing efforts in the EU to regulate cryptocurrency operations and underscored the necessity for international collaboration. The goal is to maintain financial stability while making sure investors are aware of the dangers involved, not to legitimize cryptocurrencies.