“Crypto has committed no crime”

The number of active Bitcoin users currently stands at over 900,000 addresses. (Photo: 123RF)

LES KEYS DE LA CRYPTO is a section that patiently deciphers the world of cryptocurrency and its stock market, industrial and media turmoil. François Remy’s mission is to identify promising entrepreneurs, decipher technical progress and predict the industrial and social impacts of this digital currency.

(Illustration: Camille Charbonneau)

Anti-crypto attacks are repeated without further delay. Taking advantage of the weaknesses exposed by the industry in 2022, banking regulators and monetary institutions are trying to undermine the technologies discovered by bitcoin. Deprived of a certain protection, crypto is nevertheless showing resistance.

From online betting where the fear of losing an opportunity has turned into the fear of not escaping. That’s basically it the disastrous message sent by Fabio Panetta, member of the executive board of the ECB (European central bank), to portray the crypto market. This Italian doctor of economics, whose professional trajectory has never left the main monetary institutions, calls for the end of cryptocurrencies.

This central banker prefers active dominance, with heavy-handed regulation and taxation. He opposes this tendency among some intellectuals who consist to defend laissez-faire, condemning bitcoin to the risk of vanities and sulphurous practices. There is no doubt that Fabio Panetta will simply let cryptos go up in smoke, and with them hundreds of millions of dollars in savings.

“Firstly because, despite their fundamental flaws, it is not certain that crypto-assets will eventually disappear by self-immolation. Then, because the cost to society of an unregulated industry is too high to ignore,” he counters colorfully.

“Central banks will maintain the confidence on which private forms of money depend”

This ECB director insists, reminding anyone who will believe that cryptocurrencies enjoy “no intrinsic value”, allow “no useful social or economic function” and that only investors who dream of reselling them for more than the purchase price hire them. “It’s a game of chance disguised as a financial investment,” says Panetta.

As a result, he wants to “attack the significant social costs of cryptocurrencies”, adding to the speculative nature of cryptos the facilitation of tax evasion and the dismal environmental impact. So many arguments that show, according to this staunchly asserted opponent, that time is running out to put in place safeguards worthy of the name and fill the regulatory loopholes.

The European Central Bank underlines its request for the prosecution considering that there is only one solution to provide a solid foundation for the digital finance ecosystem: “a risk-free and reliable digital asset that can only be secured by the bank’s money center” ( sic ). A statement to be evaluated in the current context of galloping inflation against a background of measured growth in the balance sheets of monetary institutions…

In any case, central banks preach about their hats and especially about their encrypted currencies (MNBC), these “blockchainized” euros, yuans or dollars, whose experimental versions fail to convince them.

“Crypto assets are incompatible with safe and sound banking practices”

In the recent cacophony of the crypto sector, central banks and regulators around the world are taking the opportunity to tune their violins and strike sensitive chords. Almost simultaneously with the ECB’s anti-crypto media outing, the same alarming sirens were heard in the United States. The Federal Reserve, the U.S. central bank, the FDIC, the agency that guarantees bank deposits, and the OCC, the Treasury department responsible for overseeing national banks, are considered “non-bankable” crypto-assets.

In the tone of the revelation at the end of a long analysis, US regulators enumerated without great originality or finesse a list of specific risks, according to them, to the ecosystem born with bitcoin: “fraud and fraud; legal uncertainties; inaccurate or misleading statements; significant volatility; banking panic” etc.

It always seems necessary to remember that decentralized public networks like Bitcoin and Ethereum were not the problem and did/did not present fundamental risks. Risks arise from the behavior of corrupt actors, technology usurpers.

“Cryptos look set to regain their propensity to outperform most traditional assets”

What the history textbooks of 2022 will capture about cryptocurrencies is not yet finalized, contrasts Bloomberg Intelligence Senior Strategist Mike McGlone. “Kodi has not committed any crime”he provides with the help of analysts in their latest analysis report, comparing the bear market of bitcoin to that of Internet-related stocks in the early 2000s.

“Cryptos are experiencing growing pains,” notes Bloomberg Intelligence. Bitcoin, Ethereum and the like are still emerging as emerging assets in a still “infancy” investment class. But the advancement of technologies would migrate to a more dominant, wider public stream.

Therefore, the graphical analysis and collected data support a rather optimistic outlook for cryptocurrencies. “In this evolution of the Internet, what cryptocurrencies bring to traditional finance looks similar to what futures and exchange-traded funds have brought. There’s not much that can stop this cutting-edge technology from doing the same thing as futures and ETFs in the long run. NFTs and decentralized exchange platforms are additional advances,” strategists consider.

In the new life of crypto, decentralized networks seem to grow during every down market cycle. “With every decline in a stable market, speculators and short-term investors flee, volumes shrink sharply, but active addresses increase.” recalls Bloomberg Intelligence. The number of such users in Bitcoin, for example, currently stands at over 900,000 active addresses. Up from 600,000 in the previous crypto winter. To think… before you fix.

To (re)read: Back to 2022 technical information

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