ROME (Reuters) -European Central Financial institution policymaker and Financial institution of Italy Governor Fabio Panetta known as on Friday for shut monitoring of the reputational dangers banks face in offering crypto-asset providers, warning that losses may hurt the belief of consumers.
Presenting the Financial institution of Italy’s annual report, Panetta warned concerning the rising hyperlinks between the world of crypto-assets and the normal monetary system, pointing to the rising variety of accords between banks and digital asset suppliers.
“Crypto-asset holders won’t totally perceive their nature and conflate them with conventional banking merchandise, with probably detrimental repercussions for confidence within the credit score system ought to losses happen,” Panetta stated.
Italy’s greatest financial institution Intesa Sanpaolo in January carried out what CEO Carlo Messina described as “a check”, by shopping for 1 million euros in bitcoins, the world’s largest digital forex.
Intesa arrange a proprietary buying and selling desk for digital belongings in 2023, and final 12 months began dealing with spot trades with crypto-assets.
Spain’s Santander is weighing a digital asset growth, together with early-stage plans to supply a stablecoin in addition to entry to cryptocurrencies for retail clients of its digital financial institution, Bloomberg reported on Thursday.
Panetta stated stablecoins, that are designed to take care of a secure worth in opposition to underlying currencies or belongings, posed a risk to conventional technique of funds if massive foreign-based know-how platforms determined to advertise their use.
“Within the absence of satisfactory regulation, their suitability as a method of cost is uncertain, to say the least,” he stated.
The central banker warned, nevertheless, that it might be silly to assume that the unfold of crypto-assets, together with stablecoins, might be curbed just by imposing restrictions.
“What is required is a response that matches the continuing technological transformation,” he stated, including that “the digital euro challenge stems exactly from this want.”
The European Central Financial institution is working to develop a digital forex to compete with non-public alternate options that danger undermining the position of central financial institution cash.
(Reporting by Valentina Za, enhancing by Gavin Jones)
