European Central Bank (ECB) official Fabio Panetta said that a number of cryptocurrencies should be banned. Stating that investors put their money in a “bubble”, Panetta drew attention to energy consumption. According to him, very energy-intensive cryptocurrencies like Bitcoin should be banned in Europe. Fabio Panetta sits on the board of the European Central Bank.
Bitcoin and these altcoins should be banned, according to ECB official
European Central Bank board member Fabio Panetta adds to the ECB’s previous criticisms of private digital currencies. ECB official gave a speech today. Accordingly, he said, cryptoassets should be banned if they use too much energy. In addition, Panetta reiterated previous criticisms, stating that the unregulated sector is like a “Ponzi scheme” and “Wild West”. He then underlined that investors are being deceived by the promise of “always rising price”.
Panetta seems to support the negative rhetoric that emerged after the collapse of FTX. The ECB has already been discussing banning energy-intensive cryptocurrencies for a long time. However, Panetta’s heavy criticism seems to be linked to the collapse of FTX. The collapse of crypto exchange FTX exposed flaws in accounting and risk management. The ECB official said that the cryptocurrency “will continue to attract investors who want to gamble.” Therefore, he stated that risky digital assets should be kept away from traditional finance.
“FTX debacle revealed the truth”
It seems that the ECB official also thinks that the assets of Bitcoin and altcoins are not needed. “It is difficult to see a justification for the existence of unsupported crypto assets in the financial environment,” Panetta said. He then added that they are too volatile and inefficient to use for regular payments. However, the official expects that the FTX debacle will likely lead investors to decentralized exchanges. However, he adds that these exchanges will be more difficult to regulate and increase financial shocks.
“We should ban cryptocurrencies like Bitcoin that use PoW mechanism”
“Crypto-assets considered to have an excessive ecological footprint should also be banned,” the ECB official said. Here he probably referred to assets like Bitcoin that use a “Proof-of-Work (PoW)” mechanism to validate transactions and secure their networks. As we have reported as Kriptokoin.com, the PoW mechanism has been criticized for its high energy consumption. Mostly legacy cryptocurrencies use this mechanism and BTC is one of them. Below you can see the top 20 cryptocurrencies using this mechanism.
The ECB’s skepticism about crypto is nothing new. Last week, two staff members said that Bitcoin (BTC) is on the “path to irrelevance”. Panetta questions whether the central bank itself should issue a digital currency. Earlier today, the administrator set some benchmarks for apps and wallets using the digital euro.
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