Crypto growing to a $1.6 trillion market without adequate regulations is a major worry for the head of Italy’s stock market oversight agency.
Paolo Savona, the chairman of the Commissione Nazionale per le Società e la Borsa (Consob) — Italy’s securities regulator — has raised alarms over crypto’s growing popularity in the absence of firm regulatory standards.
According to Reuters, Savona made this position known while delivering Consob’s annual report on Monday stating that the lack of clear-cut regulations creates an opportunity for criminals to utilize crypto for illegal activities. According to Savona:
“Without proper oversight, there could be a worsening in market transparency, the basis of legality and rational choice for (market) operators.”
Despite several research studies indicating that crypto criminality only accounts for a minute proportion of global cryptocurrency commerce, Savona has joined the chorus of financial regulators pushing the virtual currency crimes agenda.
El Salvador’s recent parliamentary vote to adopt Bitcoin (BTC) as legal tender has drawn criticism from several legacy finance gatekeepers. In the Netherlands, one Dutch official has called for a blanket ban on cryptocurrencies.
Speaking during the CNBC Squawk Box program earlier on Monday, Mohamed El-Erian, chief economic adviser at Allianz alluded to the emerging narrative, calling it “a tug of war between adoption and regulation.”
For Savona, criminals using crypto for money laundering and tax evasion are not the only problem. According to the Consob chairman, the proliferation of cryptocurrencies poses an existential threat to the ability of central banks to facilitate the sovereign monetary policies of their respective nations.
Given the extent of Savona’s crypto fears, the securities regulator panned the slow pace of activities concerning cryptocurrency regulations at the European Union level. The Consob chief stated that Italy could be forced to establish its own regulatory framework if the European Union takes too long to develop a region-wide set of laws.
However, not all the happenings on the crypto regulatory front are negative for the industry. Indeed, reports coming out of India suggest that the authorities have moved away from plans for a total ban towards more nuanced regulations. Even in the Netherlands, Dutch finance minister Wopke Hoekstra has spoken in favor of supervision instead of the prohibition of cryptocurrencies.