- April 26, 2022
- Posted by: Bastion team
- Category: World News
In a speech in New York, a member of the European Central Bank’s executive board, Fabio Panetta, criticised crypto finance for its lack of transparency and the risks it poses to financial stability, describing crypto-assets as “speculative assets that can cause major damage to society” and calling for a faster and more stringent regulation.
The speech Panetta gave at Columbia University on Monday (25 April) comes at a time when several EU regulations and directives concerning crypto finance are being debated in EU institutions.
Comparing the activity around crypto finance to the Wild West of the 19th century, Panetta called it “a digital gold rush beyond state control”.
“Crypto evangelists promise heaven on earth, using an illusory narrative of ever-rising crypto-asset prices to maintain inflows and thus the momentum fuelling the crypto bubble,” he said.
Referring to the purported developer of Bitcoin, the best known of all cryptocurrencies, Panetta said: “Satoshi Nakamoto’s dream of creating trustworthy money remains just that – a dream”.
“Crypto-assets are bringing about instability and insecurity – the exact opposite of what they promised. They are creating a new Wild West,” he said.
Panetta also criticised the high energy consumption of so-called “Proof of Work” (POW) principles that are the basis of some blockchain technologies like bitcoin. POW necessitates large amounts of computing power to solve…