Banks and Crypto: Watching the Risks
So, the European Central Bank guy, Fabio Panetta, who also heads up the Bank of Italy, gave a shout-out on Friday about banks getting into the crypto game. He's saying we gotta watch out for those reputational risks cause if folks lose money, they might stop trusting banks altogether. He presented the Bank of Italy's yearly report, and he's seeing more and more connections popping up between the crypto world and the old-school banking system. Like, banks and those digital asset companies are teaming up more.
He figures that people holding crypto might not really get what they are and could think they're just like regular bank stuff. And if things go south and they lose cash, well, that could really shake people's faith in the whole credit system. For example, Italy's biggest bank, Intesa Sanpaolo, just did this 'test' back in January. Their CEO, Carlo Messina, said they bought a million euros in bitcoin, which is like the biggest digital money out there. Intesa actually set up a whole team just for trading digital assets in 2023 and started doing those spot trades with crypto last year.
And get this, Spain's Santander is thinking about getting bigger in the digital asset space too. Bloomberg reported on Thursday that they're in the early stages of maybe offering a stablecoin and letting regular customers of their digital bank get into cryptocurrencies. Panetta also mentioned stablecoins, you know, those things that are supposed to keep a steady value against regular money or other stuff. He thinks they could be a problem for normal ways to pay if big foreign tech companies start pushing them. He pretty much said that without proper rules, it's tough to say if they're even good for paying for things.
But, he did say it would be kinda dumb to think we can stop crypto, like stablecoins, from spreading just by putting rules on it. What we really need is something that keeps up with all this tech change. And that's where the idea for the digital euro comes from, he said. The European Central Bank is actually working on creating a digital currency so it can compete with all those private ones that might mess with the central bank's money role. It's a lot to think about, right?
