{"id":249,"date":"2024-06-26T16:55:29","date_gmt":"2024-06-26T13:55:29","guid":{"rendered":"https:\/\/cryptoleobonuscode.icu\/2024\/06\/26\/cryptocurrency-trading-should-be-classified-as-gambling-says-ecb-official\/"},"modified":"2024-06-26T16:55:29","modified_gmt":"2024-06-26T13:55:29","slug":"cryptocurrency-trading-should-be-classified-as-gambling-says-ecb-official","status":"publish","type":"post","link":"https:\/\/cryptoleobonuscode.icu\/2024\/06\/26\/cryptocurrency-trading-should-be-classified-as-gambling-says-ecb-official\/","title":{"rendered":"Cryptocurrency Trading Should Be Classified as Gambling, Says ECB Official"},"content":{"rendered":"<p><iframe loading=\"lazy\" width=\"800\" height=\"450\"\n    src=\"https:\/\/www.youtube.com\/embed\/i4UfJQkj4Xc\"\n    frameborder=\"0\"\n    allow=\"accelerometer; encrypted-media; gyroscope; picture-in-picture\"\n    allowfullscreen><br \/>\n<\/iframe><\/p>\n<p>A member of the European Central Bank&#8217;s governing board, Fabio Panetta, has urged regulators to classify unsecured cryptocurrency trading as a form of wagering.<\/p>\n<p>Panetta contends that these incidents are interconnected, reflecting fundamental weaknesses and flaws in the way cryptocurrency markets function. He highlighted that excessive leverage, extensive interconnectedness, and inadequate governance frameworks among cryptocurrency participants have contributed to these repeated collapses.<\/p>\n<p>In 2022, the implosion of numerous cryptocurrency ventures, digital tokens, and platforms resulted in substantial financial losses for a significant number of individual investors. Some of the most notable failures include the implosion of the &#8220;stablecoin&#8221; TerraUSD in May, the 54% decline in the price of Bitcoin throughout the year, and the collapse of the cryptocurrency exchange FTX.<\/p>\n<p>The economist also provided insights into the limited extent to which the fallout from cryptocurrency failures has spread to the broader market. However, Panetta challenged the notion that cryptocurrencies will typically &#8220;self-destruct&#8221; and vanish.<\/p>\n<p>Activities involving wagering <\/p>\n<p>Based on the pronouncements of central bank leaders, while unbacked digital currencies lack any societal or economic utility, they are seldom employed for transactions, nor do they finance consumption or capital ventures &#8211; fundamentally, they are more of a speculative instrument than an economic tool.<\/p>\n<p>\u201cAs a means of investment, unbacked cryptocurrencies lack any inherent value. They are speculative assets. The sole reason investors acquire them is to dispose of them at a higher price,\u201d he clarified. \u201cIn essence, they are wagering disguised as investment assets.\u201d<\/p>\n<p>\u201cBut for this very reason, we cannot anticipate their disappearance. Individuals have always speculated in numerous ways. In the digital era, unbacked cryptocurrencies are likely to persist as a speculative tool.\u201d<\/p>\n<p>The Societal Costs of Digital Currency<br \/>\nPanetta also expounded on the social costs of an unfettered digital currency market. He alluded to the substantial losses investors have endured in various crypto endeavors.<\/p>\n<p>\u201cUnskilled investors have sustained significant losses,\u201d he stated. \u201cIt&#8217;s not merely the crypto that has been consumed.\u201d<\/p>\n<p>Beyond the immediate social repercussions of an unfettered digital currency market, the former Italian central banker remarked that such digital assets enable criminals to evade taxes, launder illicit funds, finance terrorism, and circumvent sanctions. He asserted that digital currencies also pose significant environmental challenges.<\/p>\n<p>\u201cThis is why we cannot permit digital currencies to remain unregulated,\u201d he emphasized. <\/p>\n<p>Its crucial to establish safeguards to tackle regulatory gaps and arbitrage problems and directly confront the substantial societal expenses associated with digital currencies.<\/p>\n<p>Paneta believes this is a challenging endeavor that demands a well-thought-out approach.<\/p>\n<p>&#8220;They must act like Odysseus, resisting the appeal of the crypto sirens, to avoid succumbing to the industry&#8217;s intense lobbying efforts. On their journey, they must avoid the perils of lax oversight and the pitfalls of legitimizing unsound crypto models.&#8221;<\/p>\n<p>Paneta commended existing legislation, such as the EU&#8217;s Markets in Crypto Assets Regulation, but emphasized the necessity for &#8220;further action&#8221; to ensure the entire industry is regulated, including so-called &#8220;decentralized finance&#8221; activities, such as digital asset lending or non-custodial wallet services. Paneta proposed a structure akin to the existing online gambling regulations.<\/p>\n<p>&#8220;Regulation should acknowledge the speculative nature of unsupported digital currencies and classify them as gambling activities,&#8221; he stated. &#8220;Susceptible consumers should be shielded through principles similar to those recommended by the European Commission for online gambling. They should be taxed based on the expenses they impose on society.&#8221; <\/p>\n","protected":false},"excerpt":{"rendered":"<p>A member of the European Central Bank&#8217;s governing board, Fabio Panetta, has urged regulators to classify unsecured cryptocurrency trading as a form of wagering. Panetta contends that these incidents are interconnected, reflecting fundamental weaknesses and flaws in the way cryptocurrency markets function. He highlighted that excessive leverage, extensive interconnectedness, and inadequate governance frameworks among cryptocurrency [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v22.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Crypto Trading: Gambling or Investment? 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