This call echoes that of the Bank of England (BoE), which estimated in March that the regulation of cryptocurrencies should be increased to prevent the growth of this sector from creating systemic risk.
The European Central Bank (ECB) on Monday called for regulation of crypto-assets, the momentum of which is such that they are now reaching a market size larger than that of sub-prime mortgages that sparked the last major financial crisis. “We must make globally coordinated efforts to bring crypto-assets into the scope of regulationsaid Fabio Panetta, member of the ECB’s executive board, in a speech delivered in New York.
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This call echoes that of the Bank of England (BoE), which estimated in March that the regulation of cryptocurrencies should be increased to prevent the growth of this sector from creating systemic risk. The growing demand for digital assets and instant payments has given rise to an ecosystem with “minorsthat create cryptocurrencies and a host of intermediaries. Around bitcoin, the most famous cryptocurrency, the size of the crypto-asset market “is now bigger than the sub-prime mortgage market was“when the latter”triggered the global financial crisis (of 2008) with a value of 1,300 billion dollars“, underlined Fabio Panetta.
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These assetscause instability and insecurity“, Criticized the Italian banker. That is why “we must ensure that (these assets) are subject to standards consistent with those applied to the financial system“argued Fabio Panetta. For this, regulators on the planet must “progress faster“to ensure that crypto-assets”do not trigger a frenzy of anarchic risk taking“, synonym of “Bulls“. But regulating is not enough: “if the official sector – public authorities and intermediaries – does not satisfy“strong demand for crypto,”others will intervene“warned Fabio Panetta. He therefore pleaded for central banks to engage in digital innovation, like the ECB which launched its digital euro project. This innovation should allow citizens to use the single currency to make payments anywhere in the euro area.
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