ECB supports CBDC development
2023.01.05 14:28
ECB supports CBDC development
Budrigannews.com – Fabio Panetta, a member of the executive board of the European Central Bank (ECB), has been a vocal advocate for central bank digital currency (CBDC) and a cryptocurrency skeptic. On January 5, he presented his most recent argument in favor of CBDC. He wrote on the official ECB blog that central banks “will safeguard the trust on which private forms of money ultimately depend” by developing CBDCs.
Panetta began his argument by giving cryptocurrency a harsh review in 2022. “Investors switched from the fear of missing out to the fear of not getting out in the crypto market last year,” he stated.
That observation served as a bridge to the argument that cryptocurrency ought to be left alone to “burn rather than regulate at the risk of legitimizing cryptos,” which led to the discussion of the position. However, this is a falsehood that is eliminated right away:
“First, despite their fundamental flaws, it is not certain that crypto assets will ultimately self-combust.”
Second, particularly for “uninformed investors,” “the cost to society of an unregulated crypto industry is too high to ignore.” In the same way that the blogpost was written, Panetta joked about environmental harm and money laundering:
“It is not just cryptos that are being burnt.”
Panetta suggested that the European Union’s Markets in Crypto Assets (MiCA) legislation was an important step after establishing the need for regulation, but that it was insufficient for crypto asset lending or non-custodial wallet services. Additionally, Panetta stated that “unbacked cryptos […] should be taxed in accordance with the costs they impose on society.” His response:
“Trading in unbacked digital assets should be treated by regulators like gambling.”
Taxes and measures to safeguard “vulnerable consumers” would be included in this treatment.
It’s amazing to see how frequently the ECB is publicly engaging on the topic of #crypto & #Bitcoin. Probably more than any other central bank in the world. https://t.co/QCcoFqNJaP
— Patrick Hansen (@paddi_hansen) January 5, 2023
Panetta argued that crypto will have flaws even with taxation and regulation. He came to the conclusion that only CBDC, “a risk-free and dependable digital settlement asset,” and preserving the central bank’s role will safeguard cryptocurrency trust.
With an entry titled “Bitcoin’s Last Stand,” the ECB blog caught the crypto community’s attention on November 30. Panetta has previously suggested that crypto assets with a significant impact on the environment should be banned.
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