{"id":27623,"date":"2023-06-26T10:46:17","date_gmt":"2023-06-26T14:46:17","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/cryptocurrencies-hold-no-societal-benefits-likens-to-gambling\/"},"modified":"2023-06-26T10:46:18","modified_gmt":"2023-06-26T14:46:18","slug":"cryptocurrencies-hold-no-societal-benefits-likens-to-gambling","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=27623","title":{"rendered":"Cryptocurrencies Hold No Societal Benefits, Likens to Gambling"},"content":{"rendered":"
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Cryptocurrencies hold \u201cno societal benefits,\u201d and should instead be seen as a form of gambling, according to European Central Bank (ECB) board member Fabio Panetta.<\/p>\n

In a speech held at the Bank for International Settlements (BIS) last week, Panetta argued that cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), fail to serve any meaningful purpose in society.<\/p>\n

He also made it clear that he believes digital assets lack intrinsic value because they are not backed by any central authority or institution, and therefore also lack trust.<\/p>\n

This makes crypto \u201cinherently highly volatile and unsuitable as a means of payment,\u201d Panetta told the audience at the BIS\u2019 22nd<\/sup> Annual Conference in Basel, Switzerland.<\/p>\n

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Link between crypto and gambling<\/h2>\n

Panetta further drew a parallel between the risks associated with gambling and the nature of crypto.<\/p>\n

He warned that \u201cthe very instability of unbacked cryptos does make them appealing as a means of gambling,\u201d and said this is essentially what centralized crypto exchanges have facilitated.<\/p>\n

Instead of offering support to this industry, policymakers in all countries should simply treat it as a form of gambling and subject it to \u201crigorous regulatory standards\u201d that \u201caddress their social cost,\u201d Panetta said.<\/p>\n

Globally coordinated regulation<\/h2>\n

If crypto is not properly regulated, the sector could in the future grow to the point where it becomes a threat to financial stability, according to Panetta.<\/p>\n

To avoid this, the ECB executive said all crypto activities should be regulated, including decentralized finance (DeFi) and self-custodial wallets.<\/p>\n

He noted that although efforts to do this in the EU are well underway with the new MiCA regulations, there is more work to be done.<\/p>\n

Additionally, Panetta stressed that regulating crypto should not be seen as a way of legitimizing it. Rather, the “same activity, same risk, same regulation” principle should be applied, he said, while noting that investors need to be fully aware of the risks.<\/p>\n<\/p><\/div>\n