ECB official urges CBDC development for the good of cryptocurrency and consumers

European Central Bank (ECB) enforcement committee subordinate Fabio Panetta has been a vocal protagonist of cardinal slope integer currency (CBDC) and cryptocurrency sceptic, and helium presented his latest statement for CBDC connected Jan. 5. Writing connected the authoritative ECB blog, helium said that, by processing CBDCs, cardinal banks “will safeguard the spot connected which backstage forms of wealth yet depend.”

Panetta began his statement with a harsh appraisal of cryptocurrency successful 2022. “Last twelvemonth marked the unravelling of the crypto marketplace arsenic investors moved from the fearfulness of missing retired to the fearfulness of not getting out,” helium said.

That reflection served arsenic a segue to an introspection of the presumption that cryptocurrency should beryllium near unsocial to “burn alternatively than modulate astatine the hazard of legitimising cryptos.” But this is simply a strawman that is instantly taken down:

“First, contempt their cardinal flaws, it is not definite that crypto assets volition yet self-combust.”

Second, “the outgo to nine of an unregulated crypto manufacture is excessively precocious to ignore,” particularly for “uninformed investors.” Panetta went connected to notation wealth laundering and biology harm, and quipped, successful the benignant that characterized the blogpost:

“It is not conscionable cryptos that are being burnt.”

Having established the necessity of regulation, Panetta suggested that the European Union’s Markets successful Crypto Assets (MiCA) legislation was an important step, but insufficient successful respect to crypto plus lending oregon non-custodial wallet services. In addition, “unbacked cryptos […] should beryllium taxed successful accordance with the costs they enforce connected society,” Panetta said. His solution:

“Trading successful unbacked integer assets should beryllium treated by regulators similar gambling.”

That attraction would see some taxation and measures to support “vulnerable consumers.”

It's astonishing to spot however often the ECB is publically engaging connected the taxable of #crypto & #Bitcoin. Probably much than immoderate different cardinal slope successful the world. https://t.co/QCcoFqNJaP

— Patrick Hansen (@paddi_hansen) January 5, 2023

Even with taxation and regulation, crypto volition person shortcomings, Panetta argued. Only CBDC “a risk-free and dependable integer colony asset,” and by preserving the relation of the cardinal bank, spot successful cryptocurrency volition beryllium safeguarded, helium concluded.

Related: ECB should person DLT wholesale settlements erstwhile the marketplace wants it, authoritative says

The ECB blog caught the oculus of the crypto community Nov. 30 with an introduction titled “Bitcoin’s Last Stand.” Panetta has antecedently proposed banning crypto assets that person important biology impact.