ECB Official Says Crypto Must Fall Under Online Gambling Laws
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European Central Bank (ECB) executive Fabio Panetta says the bank should regulate crypto assets under online gambling laws. He believes crypto is fundamentally speculative and should be treated as such.
Fabio Panetta, a Member of the Executive Board of the European Central Bank (ECB), published a post on Jan. 5, saying that trading crypto should be treated as gambling. Panetta was assertive in his remarks, saying that 2022 “marked the unraveling of the crypto market as investors moved from the fear of missing out to the fear of not getting out.”
He referred to the collapse of Terra USD in his post, noting how it was responsible for causing a cascading effect that affected other crypto companies. He even said that “Other crypto companies are likely to be added to this list in the coming months.”
However, Panetta has said that he is uncertain that “crypto assets will ultimately self-combust.” He brings this down to the fact that he thinks the crypto market is a gambling den. He described it as “a gamble disguised as an investment asset.”
As such, he does not expect them to disappear because people will continue to want to gamble. He later states that the risks of crypto are another reason why it requires regulation. He is quite blunt in his opinion on that, saying that the speculative nature of crypto means requires it to fall under online gambling laws.
Panetta Sees Crypto as Being Fundamentally Flawed
Panetta has made his opinion on digital assets well known in the past, unequivocally calling it speculative and a bubble. In Dec., he said that finance could not be trustless and stable at the same time.
He cited three fundamental flaws that he believes crypto has: being unbacked, the vulnerability of stablecoins to bank runs, and the highly leveraged and interconnectedness of the market. He expects the market to continue to exist as a speculative place.
ECB Ramping up Regulation and Digital Euro Work
Meanwhile, the ECB has been doubling down on its efforts to build the central bank digital currency, which is the digital euro. It recently signed a joint declaration on legislative priorities that had a section for the CBDC.
The digital euro has been under consideration for some time. The EU has largely been skeptical of cryptocurrency, even introducing a significant set of regulations. It is also working on a metric to classify crypto assets by their energy efficiency.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
