Spread of Unregulated Crypto a ‘Cause for Concern’ Says Italian Regulator

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In Brief
  • The continued spread of cryptocurrencies without consistent regulation is a cause for concern, according to the head of Italy’s stock market regulator.

  • Similar sentiments have been shared by other regulatory officials in Europe.

  • However, cryptocurrencies have their governmental supporters in other parts of the world.

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The continued spread of cryptocurrencies without consistent regulation is a cause for concern, according to the head of Italy’s stock market regulator.

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Paulo Savona said cryptocurrencies could potentially damage the way the market operates. He added, they could even undermine central banks’ ability to conduct monetary policy. In addition to these concerns, he expressed similar grievances over their capacity to facilitate illegal activity such as money laundering.

“Without proper oversight there could be a worsening in market transparency, the basis of legality and rational choice for (market) operators,” Savona said.

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Savona is the President of Commissione Nazionale per le Società e la Borsa (Consob), which regulates the Italian securities market. Additionally, Savona related that there were some 4,000-5,000 cryptocurrencies in circulation lacking any real form of regulation.

In addition to Consob’s recent experience of closing down websites of illegally gathered savings, “the picture that emerges is worrying,” he said. If action at European level takes too long, Savona said Italy would have to act on its own. 

European skepticism

Naturally, Savona is not alone in his skepticism of the unfettered spread of cryptocurrencies. Bank of England Governor Andrew Bailey spoke of cryptocurrencies’ “huge enthusiasm” as “dangerous”.

He additionally warned of “getting carried away” with financial innovation. Meanwhile, Irish Central Bank official Derville Rowland, reiterated Savona’s statements. She also said the rising popularity of cryptocurrencies like Bitcoin is “of great concern.” 

However, both of these positions are tame in comparison to the more vitriol perspective of a Dutch bureaucrat. Fearing an inevitable crypto crash, the Head of the Netherlands’ Bureau for Economic Policy Analysis (CPB) Pieter Hasekamp said the country must ban cryptocurrencies immediately.

Moreover, he advocated for the ban on the production, trade, and possession of crypto. These draconian measures resemble those made in more autocratic countries like Turkey and China.

Crypto supporters in government

However, cryptocurrencies are not without their supporters at the highest levels of government. Just recently El Salvador passed a bill establishing Bitcoin as legal tender in the country. On the heels of this announcement, the President of Tanzania gave a speech telling her country to “prepare for cryptocurrencies”.

She then said Tanzania should lead by example and made overtures to the Central Bank to potentially start work on a central bank digital currency (CBDC). The market seems to agree with this renewed enthusiasm, pushing bitcoin above $40,000 for the first time since the end of May.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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