The mood towards Bitcoin and digital currencies has clearly changed in the institutions of the European Union (EU). After proposing legislation to ban anonymous transactions and coming close to banning proof of work (PoW), many have begun to wonder if the world’s largest trading block might turn its back on digital currencies entirely.
Those looking for reassurance did not find it in a recent speech by European Central Bank (ECB) board member Fabio Panetta. He called the industry the Wild West, dubbed the dominant narrative in the industry “illusory,” and said the current bubble rises “like any Ponzi scheme.”
A call for global coordination on regulations
Panetta made these scathing remarks during a recent speech at Columbia University. In it, he outlined several key points.
- The value of digital currencies is driven by speculation, and they derive their prices from other speculators buying in, just like Ponzi schemes.
- There is a need for globally coordinated regulation. He highlighted four key areas, namely, money laundering, taxation, consumer protection, and regulatory reporting.
- Panetta also called for proof-of-work currencies like Bitcoin to be taxed at a higher rate to offset their environmental impact.
- The ECB bigwig also emphasized the financial risks associated with the current speculative frenzy. He noted that it is now larger than the subprime mortgage bubble that shook the world financial system in 2008.
- He emphasized how pointless many digital…
