- Fabio Panetta is an executive board member of the European Central Bank (ECB).
- The official stated that the immutability of blockchains is a negative feature of the field.
European Central Bank (ECB) executive board member Fabio Panetta has cast a gloomy future for crypto, linking it with gambling among traders. The official said that crypto assets should be regulated as a kind of gambling due to their “highly volatile” character.
In prepared comments for a panel discussion at this year’s Bank for International Settlements Annual Conference on June 23rd. Panetta predicted that the cryptocurrency market’s reputation as a “robust store of value” started to erode somewhere between the end of 2021 and the beginning of 2022. When it dropped by more than $1 trillion in value.
The ECB official stated:
“Due to their limitations, cryptos have not developed into a form of finance that is innovative and robust, but have instead morphed into one that is deleterious. The crypto ecosystem is riddled with market failures and negative externalities, and it is bound to experience further market disruptions unless proper regulatory safeguards are put in place.”
Negative Feature
Panetta also said that the “security, scalability, and decentralisation” of crypto transactions was “not achievable.” And that the immutability of blockchains is a negative feature of the field since transactions cannot be undone.
As examples of “fundamental shortcomings” in the ecosystem, he pointed to the demise of FTX and a recent lawsuit filed by the United States SEC against Binance.
Parts of the ECB’s proposals for a prospective digital euro, which are now under study, have already had Panetta’s support. In addition, he has advocated for the prohibition of crypto assets having an “excessive ecological footprint” in an attempt to mitigate environmental hazards.
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