While the growth of crypto across countries have made many financial institutions to look at it more seriously, it has also led to a sense of apprehension among some officials in those institutions. Recently, Executive member of the European Central Bank (ECB) has shared his views about the explosive growth of crypto.
Fabio Panetta member of the Executive Board of the European Bank talked about this in a recent address at the Columbia University. In his speech, he remarked that the crypto market is larger than $1.3 trillion sub-prime mortgage market in 2008. In fact, he made some resemblance of crypto to a ponzi scheme, saying:
“Crypto evangelists promise heaven on earth, using an illusory narrative of ever-rising crypto asset prices to maintain inflows and thus the momentum fueling the crypto bubble.“
Also, he alleged that crypto transfers take a lot of time to complete. He also mentioned the wild fluctuation in the prices of digital coins such as Bitcoin and Ether. Besides this, he pointed out that “each crypto transfer leaves a trail through which we can track these ‘supposedly anonymous’ transactions.”
Fabio is convinced that crypto can cause “major damage to society” stating:
“This house of cards collapses, leaving people buried under their losses.”
He has warned authorities that they should not repeat previous mistakes by waiting for the bubble to burst.
The ECB official said:
However, he admitted that with the increase in crypto, there is an increasing demand for digital assets and instant payments.