Blockchain & Crypto

ECB Executive Urges to Assimilate Crypto with Gambling

ECB board member Fabio Panneta suggests trading unbacked crypto assets should be regulated similarly to gambling

crypto gambling

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In a blog post, Fabio Panetta, a Member of the Executive Board of the ECB, describes crypto investments as gambling disguised as an investment asset. Therefore, it should be legally treated as gambling as well.

The executive mentions a chain of crypto-related collapses that highlight “crypto players’ incredibly high leverage, their interconnectedness across the crypto ecosystem and their inadequate governance structures.”

Unlike other regulators who treat crypto as another “bubble” or even scam, Panetta realises the industry is not going anywhere. However, he stresses that crypto is more akin to “a vehicle for gambling” than any solid investment asset.

"They do not perform any socially or economically useful function: they are rarely used for payments and do not fund consumption or investment. As a form of investment, unbacked cryptos lack any intrinsic value, too. They are speculative assets. Investors buy them with the sole objective of selling them on at a higher price. In fact, they are a gamble disguised as an investment asset."
Fabio Panetta, Member of the Executive Board of the ECB

Therefore, Panetta believes regulators should acknowledge the speculative nature of unbacked cryptos and start treating them as gambling activities. The executive urges legislators to take control over the industry, as “the cost to society of an unregulated crypto industry is too high to ignore.”

In his opinion, legal acknowledgement of the speculative nature of crypto assets would prevent major losses for uninformed investors. Besides, the lack of regulation causes possible negative outcomes of crypto trading. Those include tax evasion, money laundering, terrorist financing and the circumvention of sanctions.

Panetta also highlights the high environmental costs of crypto mining which should be addressed as well.

SEE ALSO:

Indonesia to Create a National Crypto Exchange in 2023

UK Offers Tax Exemption for Foreign Crypto Investors

India Considers Prohibiting Unbacked Crypto Under G20 Presidency

Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.