Less Bitcoin, more digital and sovereign currencies. The European Central Bank returns to mark the perimeter of the new currencies, embracing the digital revolution as long as there are clear rules and not even an ounce of speculation. And it does so at the end of a year in which Bitcoin and its brothers have struck flare-ups and ruinous falls, thanks to the hand of Elon Musk , Tesla’s patron. It is certainly no mystery that in Frankfurt they never digested cryptocurrencies, considering them a danger to global monetary stability. And of this they are also convinced by the parts of the Federal Reserve, while in Italy those who carry on the battle against Bitcoin and Consob of Paolo Savona . Fabio Panetta, a member of the board of the ECB with responsibility for payment systems, said his opinion on cryptoassets, instruments “without economic or social utility and, indeed, some crypto-activities represent a source of enormous pollution and environmental damage”. And in general “they are fictitious instruments with no intrinsic value, which do not generate income streams, coupons, dividends, and do not offer any service of use to the holder. They are created through IT procedures, and there is no subject, no guarantee that ensures their value “.
In short, “in fact, they represent a bet, a high-risk speculative contract with no fundamentals. For these reasons their value records very strong fluctuations. As is evident, crypto-assets are unsuitable for carrying out the three functions of money: means of payment, store of value and unit of account “. The problem is that the value of cryptocurrencies is growing rapidly and currently exceeds 2.5 trillion dollars worldwide.
“This is a large amount, capable of generating risks for financial stability that should not be underestimated. For example, it exceeds the value of securitized subprime mortgages that triggered the global financial crisis in 2007-2008. Despite the considerable size of the phenomenon, there are no indications that crypto-activities have performed or are performing functions of economic or social utility: they are not commonly used for retail or wholesale payments, they do not finance consumption or investments, they do not contribute to the fight against climate change ”, Panetta warned.
The reference to the legal and sovereign instrument with which to fight Bitcoin and its peers and to which the team coordinated by Panetta has been working for years is inevitable. “The digital euro is a very important project which I believe will be inevitable in the end. The world is moving towards digitalization and it will be difficult for this project not to be implemented very broadly and extensively in the end. If everything is successful, the launch of the digital euro will take 5 years ”.
Actually, even Jerome Powell ‘s Fedhas long been targeting cryptoassets, albeit less directly than the ECB did. In recent weeks, the American central bank has warned the world of stablecoins, digital currencies anchored to the dollar. If in January 2021 the equivalent of 28 billion dollars were in circulation, today the figure has grown to over 130 billion. However, companies like Tether and Circle provide cryptocurrency traders with a more convenient way to get in and out of highly volatile assets like Bitcoin and Ether. This prospect has already warned central banks, which fear the conversion of large amounts of money into this new form of money that would be subtracted from monetary policy.
But there is another, more subtle enemy: inflation. To weigh on the entire cryptocurrency sector is in fact the progressive affirmation of risk aversion on financial markets in the face of the uncertainty triggered by the Omicron variant and the unknown attitude of the Fed in the face of the reappearance of inflation, which in the USA , in November, it rose to 6.8%, the highest since 1982. When Ronald Reagan was president.
