European Central Bank board member Fabio Panetta at Columbia University today crypto assets and bitcoin gave a speech about
Dream
He said that Satoshi Nakamoto’s dream of “safe money” while creating Bitcoin was a complete dream, and compared it to the gold rush that started years ago.
“170 years ago the Americans rushed for gold. Greed and lawlessness have transformed this land into the Wild West where the imagination of the majority is exploited.
Fast-forward to a century and a half and amid the global financial crisis, growing distrust of banks and technological innovation have spawned a new dream: a digital gold rush beyond government control.”
Stating that crypto assets create instability and insecurity beyond what they promise, Panetta said that the story of decentralization did not find a response, and that transactions are made through central wallets in El Salvador today.
“Before the Balloon Pops…”
Stating that the growth in the crypto money markets is dangerous, Panetta said that we should not wait for the bubble to burst and said:
“We should not wait for the bubble to burst and realize how pervasive crypto risk has become in the financial system and not repeat the same mistakes.
While some may hope to become wiser and escape in time, many will fall into the trap.”
Stating that people’s demand for digital money should also be responded to, the member called for regulation and said:
“The time has come to ensure that crypto assets are used only within clear, regulated boundaries and for purposes that add value to society.
Today, I will discuss that currently crypto assets are not only speculative and high-risk investments, but also raise public policy and financial stability concerns. Next, I will discuss some of the elements of public policy necessary to protect investors and maintain financial stability without stifling innovation.”
In the continuation of his speech, Panetta evaluated the subject under the headings of “The rise of crypto assets, crypto assets and public policy concerns, crypto assets and financial stability risks, regulation of crypto assets” and talked about the environmental effects and damages of POW, the mining method used by Bitcoin. He stated that a higher tax option could be considered in taxing crypto assets.
“We Must Act Quickly”
In the concluding part of his speech, Panetta said:
“We need to make coordinated efforts at the global level when regulating cryptoassets. We need to ensure that they are subject to standards that are compatible with the financial system.
In doing so, we will have to contend with complex choices, balancing the goals of fostering innovation, maintaining financial stability and ensuring consumer protection.
If we want crypto-assets not to trigger an unlawful risk-taking spree, we need to move forward faster.
Central banks should engage even more in digital innovation by developing fast retail payment systems and preparing for the issuance of central bank digital currencies.”