April 27, 2022
‘Crypto industry is a potential threat to stability, the environment and consumer protection’ – MacManus

‘Crypto industry is a potential threat to stability, the environment and consumer protection’ – MacManus
Sinn Féin MEP Chris MacManus has supported calls from ECB Executive Board Member Fabio Panetta, who in a keynote speech  talked about the “Wild West for crypto finance”[i] and the need for strict regulation and oversight of crypto-asset trading. MacManus, who is one of the key MEPs following the EU’s proposed regulation on crypto-assets, said Mr. Panetta’s comments should be a wake-up call for the EU and national governments. 
MacManus said:
“I welcome the timely comments from Mr. Panetta, which echo many of the concerns I have been raising. There are major issues with crypto-asset trading that we are only beginning to come to grips with.  The libertarian world-view of crypto-asset founders and traders is at complete odds with good regulation, consumer protection and financial stability. The last thing the global economy needs is a bubble similar to the subprime mortgage crisis of 2007-2008.”
“As we have seen with their use to avoid sanctions on Russia, crypto-assets are often outside the regulatory grasp. This is only the latest example of how they are used to circumvent legal norms and anti-money laundering rules.”
“As Mr. Panetta points out these assets are supposed to be treated like any other asset for the purposes of taxation but the foundational anonymity some of these assets pride themselves on means this is easier said than done. If crypto-assets continue to grow, the risk to the tax base will also grow.”
“I have also raised deep concerns about the environmental impact of some of the crypto-assets whose “proof of work” model entails massive, and ever increasing, energy use and waste. Regardless of whether they use renewable energy or they still represent a drain on energy production needed for actual productive uses that bring real and tangible benefit to society.”
I have managed in my work in the EU Parliament to insert many consumer protection issues into the proposed EU legislation but the ECB’s warnings about crypto must act as a wake-up call for regulators, the EU and national governments. We cannot sleep-walk into a situation where unregulated, shady crypto-assets are threatening financial stability and consumers. The EU must not compromise on its regulation and the environmental, tax and social concerns that crypto-assets create must also be tackled head-on.” ENDS

Notes to Editor:
Link to Speech by Fabio Panetta, Member of the Executive Board of the ECB, at Columbia University

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