ECB Member Pushes For Stricter Global Regulations on Cryptocurrencies

Fabio Panetta (a member of the Executive Board at the European Central Bank) pushed for tighter regulations regarding cryptocurrencies on April 25 to prevent any type of “instability or insecurity” on a level financial.

Panetta spoke at Columbia University and referred to the rapid growth of the crypto market with a valuation of $1.3 trillion. This indicates that it is larger than any high risk market when the 2008 global financial crisis began.

Fabio Panetta, Executive Board member at @Columbia, stated that global coordination is essential to bring crypto-assets within a regulatory framework. We must not repeat past mistakes by waiting for the bubble to burst before acting https://t.co/dGo0HV0KmL

1/5 pic.twitter.com/2MpmkmtoG4

— European Central Bank (@ecb), April 25, 2022

The ECB Views the Crypto Market as a Boss Waiting to Pop

Panetta stated that this boom was based on speculation, the promise of rapid returns and “exploiting regulatory loopholes which leave investors without protection.”

“We cannot repeat the same mistakes of waiting for the bubble burst to realize how widespread crypto risk is in the financial system.

Panetta admits that crypto assets are more than speculative, high-risk investments. He argues that crypto assets can have an impact on the financial stability of the world and state policies.

Panetta explained that stablecoins are a risk to nations. This is a stance the ECB already shares. The minters of tokens cannot guarantee that they will be redeemable at all times and don’t have access to the permanent facilities offered by a Central Bank. Panetta stated that about a third of all stablecoins issued in recent years have failed to survive.

Volatile cryptocurrencies are not able to fulfill their purpose

Panetta said that crypto assets are not able to fulfill their purpose due to volatility and lack proper backing. Panetta highlighted the 60% drop in Bitcoin’s value after it reached $68,000. This was four times greater than that of U.S. stocks and more than gold.

“Cryptocurrencies are too volatile to fulfill the three functions money has: store of value, medium of exchange and unit of account.”

Panetta suggests a more strict global regulatory approach because of the rapid adoption of cryptocurrency. Panetta expressed concern about the inability of countries that have ban crypto to ensure that their mandates are effective.

We need global coordination in regulatory action to address issues like the use of crypto-assets for cross-border illegal activities or their environmental footprint. Regulators should balance the benefits and risks so that innovation can be stimulated in payments and other applications.

Panetta emphasized 4 points that are important to better control crypto assets.

They should be held to the same standards that the rest of the financial sector.

This new regulation is not intended to stop innovation, but rather to protect money and savings. It would help to keep central banks in control of the economy, which they have enjoyed for many years.

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Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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