For the members of the Executive Committee of the European Central Bank, virtual currencies are "speculative activities" with "problems of public order and financial stability". Yes to the digital euro: "It would strengthen the monetary sovereignty of the EU"
16 May 2022
Cryptocurrencies are not a reliable form of "currency" free from public control: they are "too risky to serve as a reliable means of payment." This was stated by Fabio Panetta, member of the Executive Committee of the ECB in a speech in Dublin on the occasion of a debate on the digital euro organized by the National College of Ireland.
"Recent developments in the cryptocurrency market show that it is an illusion to believe that private instruments can act like money when they cannot be converted at par into public money at all times," said Panetta, noting that, instead, currencies based on blockchain technology "they behave more like speculative activities and raise multiple problems of public order and financial stability". "Anyone who invests in cryptocurrencies must be ready to lose all their investment", concluded Panetta.
Index of topics
• Digital currencies: serves the management of central banks
• The digital euro for modern and reliable payments
• The strategic autonomy of the EU
• Cryptocurrencies, Italians are starting to invest
Digital currencies: central bank management is needed
Panetta also said that it is important that central banks maintain control of payment instruments, especially digital ones, since "a system based on technologies and practices designed, managed and supervised elsewhere would undermine the ability of authorities to exercise their supervisory control ".
"The coexistence of public and private money can continue to be a win-win situation, perhaps even more so in the digital age," added Panetta. "Central bank digital currencies will allow public money to continue to play their role in anchoring the stability of the payment system and contributing to its efficiency. And private money will add innovation and diversity ”to this scenario. But "A scenario in which the digitization of payments would lead to the listing of most prices in a foreign or private unit of account would significantly reduce the central bank's ability to influence monetary and financial conditions."
The digital euro for modern and reliable payments
Regarding the digital euro specifically, Panetta pointed out that "It would strengthen our monetary sovereignty and provide a form of central bank money to make daily digital payments in the euro area, just like cash for physical transactions. To be successful, a digital euro will have to add value for users, promote innovation and enjoy strong political and social support ".
"The growing popularity of non-cash payments and the expansion of cryptocurrencies," continued Panetta, "reveal a growing demand for immediacy and digitization. If the mainstream sector - central banks and supervised intermediaries - does not meet this demand, others will. For this reason, many countries around the world are currently exploring the issuance of a central bank digital currency. "
The strategic autonomy of the EU
The digital money issued by the central bank would offer everyone the possibility to use public money for digital payments, Panetta said: "It would be a solid and reliable means of payment, conceived in the public interest and would preserve the coexistence of sovereign and private money which has served us well so far. In Europe, the issuance of a digital euro would also allow us to protect our strategic autonomy by remaining open in a world where technology and addictions are increasingly used as weapons ".
Cryptocurrencies, Italians are starting to invest
89% of Italians have sometimes heard of cryptocurrencies, while 11% who do not know anything about it: this is what emerges from a survey carried out by OAM, an agency for agents and mediators, in collaboration with the University of Tor Vergata, among a sample of 774 Italians of age, equally divided between men and women.
Almost equally distributed on the basis of gender (52% men and 48% women), the subsample of those who know cryptocurrencies is characterized by a good level of general financial knowledge ("good or excellent" for 64% of respondents and "fair" for 25%. However, in relation to virtual currencies, 61% of the sub-sample claims to have limited knowledge on new digital currencies, while the remaining 39% demonstrate a good (33%) or even a thorough and accurate knowledge of za (6%).
The survey also shows that, as the level of knowledge about cryptocurrencies increases, the propensity to invest increases. Among the 61% who have "heard of cryptocurrencies a few times", 11% said they have bought cryptocurrencies in the past but will not do so in the future while 14%, despite superficial knowledge, still intend to buy them for the first time in the future; 1% expressed their intention to continue their past investments in cryptocurrencies in the future.
Among those who declared that they had "thoroughly deepened their knowledge on cryptocurrencies" (6% of the subsample), 29% of respondents declared that they have bought cryptocurrencies in the past but will not do so in the future; 37% intend to buy them for the first time in the future; 22% will give continuity to their past investments in cryptocurrencies; only 12% revealed that they do not want to invest in digital currencies either in the future. The majority of those who invest do not exceed the threshold of 10 thousand euros.