Latest News

ECB seeks urgent regulation after multiple crypto bubbles burst

ECB seeks urgent regulation after multiple crypto bubbles burst By Reuters

Breaking News

‘;

Economy 19 minutes ago (Dec 07, 2022 15:07)

© Reuters. FILE PHOTO: Representations of cryptocurrencies plunge into water in this illustration taken, May 23, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

FRANKFURT (Reuters) – Crypto assets are here to stay so their regulation is urgently needed to protect investors and the stability of the global financial landscape, European Central Bank board member Fabio Panetta said on Wednesday.

Crypto investors suffered a series of blows this year from the collapse of the FTX exchange, to the crash of stablecoin TerraUSD and the decline of Bitcoin.

“This is not just a bubble that is bursting. It is like froth: multiple bubbles are bursting one after another,” Panetta said in a speech in London. “Investors’ fear of missing out seems to have morphed into a fear of not getting out.”

Unbacked crypto assets are a form of financial gambling without any socially or economically useful function, so the task is to thwart criminal activity, protect unassuming investors and save a financial system that may become increasingly intertwined with crypto assets, Panetta said.

Graphic: Market capitalisation of crypto assets https://fingfx.thomsonreuters.com/gfx/mkt/byvrljzkave/Pasted%20image%201670422836032.png

Even stablecoins, which are supposed to keep their value through ties to a pool of assets, are stable in name only, Panetta said.

“But these flaws alone are unlikely to spell the end of cryptos,” Panetta said. “Gambling is perhaps the second oldest profession in the world.”

The links between the crypto market and the financial system could strengthen, especially if major tech companies enter the sector, meaning regulation is urgently required, Panetta said.

Regulatory efforts should be directed primarily at preventing the use of crypto-assets to circumvent financial regulation and in shielding the mainstream financial system from crypto risks, Panetta said.

ECB seeks urgent regulation after multiple crypto bubbles burst

Our Apps



Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News