ECB Executive Board: “Crypto is a kind of gambling”

In a recent article on crypto regulation, ECB executive member Fabio Panetta calls for treating cryptocurrencies like gambling.

Under the EU’s 2014 gambling directives, for example, minors will be prohibited from buying crypto. In addition, authorities will treat digital currency providers as casino owners and national consumer protection laws will apply.

Fabio Panetta: Cryptocurrencies are gambling

Bitcoin opponent Panetta again spoke out against cryptocurrencies in an article titled “Caveat emptor does not apply to crypto”. The title refers to a principle from legal practice (caveat emptor), according to which the buyer alone bears the risk of the purchase – according to Panetta, this cannot apply to digital assets. On the contrary, the state must take tougher measures to protect its citizens. The reason for this is that (unsecured) cryptocurrencies are essentially a form of gambling:

“Take unsecured crypto-assets for example. They serve no socially or economically useful function: they are rarely used for payments and do not finance consumption or investment. Unsecured cryptocurrencies also have no intrinsic value as a form of investment. They are objects of speculation. Investors buy them out of hand purpose of reselling them at a higher price. In reality, they are a gamble disguised as an investment.”

Although the crash of stablecoin Terra USD and the resulting contagion spared the financial market, the EU cannot continue to ignore the digital currencies, Panetta said. After all, cryptocurrencies would not just disappear as people have always taken advantage of gambling offers and will continue to take advantage of such offers. In addition, the costs to society so far are too high. Therefore, the ECB’s executive board calls for unsecured cryptocurrencies to be treated as gambling under the MICA agreement (Markets in Crypto Assets).

He also stressed the need to establish the euro as a risk-free basis for the digital economy.

Comparing what is now a nearly $1 trillion market to a casino and wanting to regulate it under a gambling law sparked a flood of comments on the ECB’s Twitter account.

Numerous members of the crypto community questioned the banker’s reasoning, pointing out the contradictions and generalizations. In addition, some warned of the possible dangers of a digital euro and clarified the benefits of bitcoin and other digital assets.

Jakob “Jake” Senftinger of Kryptorecht.xyz criticized Panetta for his sweeping statement. In a tweet, the lawyer explained that “bare” digital assets are backed by people, open source and clients who give them their value. This gives them functionality.

More Twitter users like Marko B., the founder of Bitcoin advisory platform InevitableBTC jokingly asked if the euro was backed or secured by anything.

In particular, many users criticized the ECB’s inflation policy and encouraged other users to buy Bitcoin because of it.

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