Global regulators need to hasten efforts to introduce a coordinated framework to tackle the crypto-asset Wild West, the European Central Bank's Fabio Panetta has warned.
ECB executive board member Panetta used a speech at Columbia University to warn that crypto assets are bringing about instability and insecurity, "creating a new Wild West".
"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," says Panetta.
Not only is crypto being used for tax evasion and criminal and terrorist activities, it is also threatening financial stability, requiring an urgent response from authorities.
Says Panetta: "We need globally coordinated regulatory action to address issues such as the use of crypto-assets in cross-border illicit activities or their environmental footprint."
He concludes: "We should make faster progress if we want to ensure that crypto-assets do not trigger a lawless frenzy of risk-taking."