Digital euro key to regulate crypto, ex-ECB official says
Former European Central Financial institution (ECB) official and Governor of the Financial institution of Italy, Fabio Panetta, touted the digital euro as a key device for controlling the dangers of accelerating cryptocurrency adoption.
The Financial institution of Italy, on Might 30, launched an annual report with the governor’s concluding remarks on the state of the economic system. Panetta mentioned the European Union should transfer ahead with the central financial institution digital foreign money (CBDC) challenge to take care of monetary stability and meet demand for safe digital funds.
“We might be remiss to suppose that the evolution of crypto-assets may be managed solely by guidelines and restrictions,” Panetta mentioned, warning that crypto regulation alone can’t deal with the systemic dangers posed by crypto, and that the digital euro can be key to addressing them.
MiCA’s restricted impression on EU stablecoins
Panetta additionally addressed the impression of the EU’s crypto regulatory framework, the Markets in Crypto-Property Regulation (MiCA), which entered into full power in late 2024.
“Since MiCAR got here into power, just some EMT [electronic money token] stablecoins have been issued within the EU and their circulation is proscribed up to now,” the governor acknowledged.
He additionally mentioned MiCA has not fueled any important stablecoin developments in Italy:
“In Italy, there has up to now been little curiosity within the issuance of crypto-assets by supervised intermediaries and different operators, whereas a rising deal with custodial and buying and selling providers has been noticed.”
MiCA has inspired companies to report in the event that they plan to launch crypto asset providers or intend to use for authorization to take action, he added.
Dangers stemming from overseas platforms
Whereas providing some safety to European traders, MiCA has not absolutely safeguarded savers from the dangers related to “heterogeneity in regulatory approaches” globally, Panetta argued.
“EU residents is perhaps uncovered to failures of platforms or issuers based mostly in different jurisdictions that lack enough controls or the required transparency and operational safeguards,” he mentioned.
He known as for stronger worldwide cooperation and urged the EU to guide on establishing world regulatory requirements.
Digital euro is finally the fitting device
Panetta mentioned that solely a digital euro, backed by the central financial institution, may supply the required belief and performance in a altering fee panorama:
“What is required is a response that matches the continued technological transformation, one able to assembly the demand for safe, environment friendly, and accessible digital fee devices, all whereas preserving the function of central financial institution cash,” he mentioned. “The digital euro challenge stems exactly from this want.”
Panetta’s remarks echo the agenda promoted by ECB Government Board member Piero Cipollone, who has advocated for the launch of a digital euro, citing the rising reputation of US greenback stablecoins, which now make up 97% of the whole stablecoin market.
Associated: Why Tether refuses to adjust to MiCA
Beforehand a member of the ECB’s Government Board, Panetta resigned in October 2023, along with his place subsequently stuffed by Cipollone.
Panetta’s report got here weeks after Tether, the issuer of the world’s largest US dollar-pegged stablecoin, USDt (USDT), defended its determination to skip MiCA registration for USDT in early Might.
“MiCA license could be very harmful on the subject of stablecoins, and I imagine that’s much more harmful for the small, medium banking system in Europe,” Tether CEO Paolo Ardoino mentioned on the time.
Journal: How crypto legal guidelines are altering the world over in 2025