ECB executive calls for hard passing against lawless madness of the crypto trade

A high-ranking civil servant of the European Central Bank launched a tirade against cryptocurrencies, compared it with a "ponzi system" and demanded that you can avoid a "lawless frenzy of risks".

Fabio Panetta, the board member, who monitors the work of the ECB on a digital euro, called for "coordinated efforts at a global level to bring crypto-assets into the supervisory area" by increasing taxation, the rules against money laundering are improved and the disclosure is improved.

The central bank has little power to act against the market, except for its role in monitoring the large banks of the euro zone and monitoring financial stability.

civil servants have criticized cryptocurrencies earlier, but Panetta's comments represent an escalation of the ECB campaign against crypto-assets such as Bitcoin and Ethereum, which have spread greatly in recent years and, according to Coinmarketcap, have a common market value of more than $ 1.8 trillion.

"Crypto assets are speculative assets that can harm society great," said Panetta. "At the moment they relate their value mainly from greed, they rely on the greed of others and the hope that the scheme will continue freely.

While crypto-assets only make up 1 percent of the total global financial assets, Panetta found that they have grown bigger than the market for US Subprime mortgages in 2008 when its collapse triggered a financial crisis.

"We must not repeat the same mistakes by waiting for the bladder to burst and only then recognize how omnipresent the risk of cryptor in the financial system," said Panetta and warned that "wealthy investors, financial advisors and family offices now lead to investing in crypto-assets."

"As in a Ponzi system, such a dynamic can only last as long as a growing number of investors believe that the prices will continue to rise and that there can be a fiat value that is not secured by income or guarantees.

Panetta warned that little capital gains tax is paid for crypto assets and that they would often be used for tax evasion, and said: "There could also be reasons for the higher taxation of some crypto assets..

The price of Bitcoin fell from almost $ 69,000 in November to just under $ 40,000 on Monday. Panetta said this high volatility made crypto-assets unsuitable as a means of payment or as a value stimulant for households.

Coving investigations that found that transactions worth $ 72 billion with crypto-assets-more than a fifth of the total-are associated with criminal activities every year, Panetta also said that the crypto trade had increased with the ruble after sanctions against Russia were imposed this year.

The EU currently concludes legislation, which is called "markets for crypto-assets" and is to be implemented in the next two years. But Panetta said "Europe's regulatory measures have to go on", including combating "non-secured crypto-asset activities that are carried out without service providers".

"In addition, we cannot afford to leave on-chain peer-to-peer payments unregulated because they can be used to bypass any regulation," he said, adding that Europe's planned anti-money laundering authority should monitor providers of crypto-assets.