According to a high-ranking official at the European Central Bank, Bitcoin inventor Satoshi Nakamoto lacked an “in-depth understand” of money issues while creating BTC.
Fabio Panetta, a member of the European Central Bank’s executive board, says in a new speech at Columbia University that Nakamoto’s ambition of generating trustworthy money remains unrealistic.
“Satoshi Nakamoto – or rather the software developers using that pseudonym – created the source code of what they thought could be decentralized digital cash. Their 2008 white paper shows a great fascination with technology, notably cryptography, but not necessarily an in-depth understanding of payment and money issues. They aspired to realize an anarchistic utopia of a stable currency free from public scrutiny.”
Panetta claims that most crypto market participants still rely on intermediaries, which opposes Nakamoto’s vision of decentralization.
He also drew comparisons between the crypto market and the subprime mortgage meltdown that triggered the 2008 financial crisis.
“Indeed, the crypto market is now larger than the subprime mortgage market was when – worth USD 1.3 trillion – it triggered the global financial crisis. And it shows strikingly similar dynamics. In the absence of adequate controls, crypto assets are driving speculation by promising fast and high returns and exploiting regulatory loopholes that leave investors without protection. Limited understanding of risks, fear of missing out and intense lobbying of legislators drive up exposures while slowing down regulation.”
“Regulation should balance the risks and benefits so as not to stifle innovation that could stimulate efficiency in payments and broader applications of these technologies,” he added.
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