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ECB Board Member Blows Up Crypto Market As Wild West Ponzi Scheme

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A European Central Bank executive has launched a savage attack on the cryptocurrency market, calling it “a new Wild West” that “brings instability and uncertainty” to financial markets and could trigger a new financial crisis.

Speaking at Columbia University in New York, Fabio Panetta compared aspects of crypto investing to those of a Ponzi scheme, saying, “It takes few to climb the ladder – even if their gains are temporary – to gain many others of it.” to convince that they do miss”

He also said that crypto markets are now exceeding the size of the subprime mortgage market that sparked the 2008 financial crisis and that crypto is “showing strikingly similar dynamics.”

“We must not repeat the same mistakes of waiting for the bubble to burst and only then realizing how pervasive crypto risk has become in the financial system,” he told the Ivy League audience.

“And while some hope to be smarter and get out in time, many will be trapped.”

He went on to attack cryptocurrencies as the domain of ruthless actors and criminals, legitimized by media hype, social media herd mentality and fear of missing out.

“This strong attraction to crypto assets, especially unsecured ones, is a concern given the lack of fundamentals and the number of recent scandals[13]their use for illegal activities and the high volatility of their prices,” he said.

“All of this points to unsound underlying market dynamics.”

He said that crypto assets like Bitcoin could never successfully replace ordinary currencies as money due to their volatility and lack of regulatory oversight.

He went on to detail the use of cryptocurrencies as a means of money laundering and tax evasion by organized crime, terrorism and corrupt governments like North Korea.

He called for a coordinated global effort to get a grip on cryptocurrencies by taxing them heavily, subjecting them to intense regulatory scrutiny and imposing strict transparency requirements.

He said that with more than $3 trillion at stake in the global market, unregulated peer-to-peer transactions must be ended to help safeguard financial stability.

https://www.independent.ie/business/world/ecb-board-member-blasts-crypto-market-as-a-wild-west-ponzi-scheme-41586611.html ECB Board Member Blows Up Crypto Market As Wild West Ponzi Scheme

Fry Electronics Team

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