European Central Bank official Fabio Panetta has argued that the crypto market cannot be trustless and stable without adequate transparency and regulatory safeguards.
Panetta while speaking at the London School of Economics on Dec. 7, said that the FTX implosion showed that crypto was a bubble waiting for the right time to burst. It exposed the poor business practices of crypto firms and a lack of due diligence by investors of all sizes.
Notwithstanding, Panetta said that the recent implosions may not be the endgame for crypto. To maximize the promise of crypto finance, he said that certain fundamental flaws of the crypto market need to be addressed.
On the first flaws of the crypto industry, Panetta argued that many crypto assets are unbacked which makes them too volatile and without intrinsic value. As a result, they cannot be used for digital payments but only serve as speculative assets.
Concerning stablecoin stability, Panetta argued that crypto assets (like UST) cannot maintain s
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