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HomeLatest NewsThe ECB is committed to regulating cryptocurrencies as games of chance

The ECB is committed to regulating cryptocurrencies as games of chance

Date: January 28, 2023 Time: 09:37:41

The European Central Bank (ECB) gives another twist to its warning message about the risks involved in investing in cryptocurrencies in the midst of a storm in the markets for this type of asset. Fabio Panetta, a member of the executive board of the European Central Bank (ECB), has called for unbacked cryptocurrency trading to be regulated in a similar way to gambling.

It has done so through an opinion article published on Wednesday by the British ‘Financial Times’. The main characteristic of digital assets such as bitcoin, ethereum or dogecoin is that they do not have the backing of a central bank, as will happen with the digital euro project once it enters circulation, hence Panetta expressly cites those who They don’t have that support. The latter would be issued centrally and can be intervened.

In his analysis, the Italian claims that unbacked crypto assets “serve no socially or economically useful function” as they are rarely used for payments. He has also added that they do not finance consumption or investment, which is why he maintains that, as a form of investment, they also lack intrinsic value. This is why cryptocurrencies have been described as “speculative assets” that “investors buy with the sole objective of selling them at a higher price.”

Panetta Compares Buying And Selling Crypto To “Gambling”

In his article, Panetta also points out that “they are a bet disguised as an investment asset.” In this sense, he considers that, due to their gambling nature, they cannot be expected to disappear on their own, since people have always gambled in many different ways and in the digital age, “it is likely that unbacked cryptocurrencies will continue to be a vehicle for gambling”, ditch.

He also warned that the cost to society of an unregulated crypto industry is too high to ignore, as well as entailing high environmental costs.

“Regulation should recognize the speculative nature of unbacked cryptocurrencies and treat them as gambling activities”

“Regulation should recognize the speculative nature of backed cryptocurrencies and treat them as gambling activities” online and taxed according to the costs they pose to society.

At the same time, the Italian warns that regulation and taxes alone will not be necessary to address the shortcomings of cryptocurrencies, thus calling for a reliable and risk-free digital settlement asset, “which can only be provided for money from the central bank. “This is why the ECB and central banks around the world are working on retail and wholesale central bank digital currencies,” he says.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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