ECB Official Says Satoshi Nakamoto Did Not Understand Money – Really?

April 29, 2022

Executive board member of the European Central Bank (ECB), Fabio Panetta, believes that Bitcoin’s pseudonymous creator Satoshi Nakamoto was lacking a “in-depth understanding” of money issues when he developed the flagship cryptocurrency.

Speaking at Columbia University, Panetta said:

“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.”

According to the ECB official, the crypto market is not as decentralized as Satoshi intended and is still relying on intermediaries. (Editor’s note: This might be true for many cryptocurrencies and altcoins, but not Bitcoin)

Panetta warns for a crisis as he compares the crypto market with the run-up to the 2008 Financial Crisis, saying:

“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.”

He then brings the often used yet unjust accusations of crypto’s illicit use and high carbon footprint to the table as he calls for tighter regulations:

“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.”

At the time of writing, the global market cap for cryptocurrencies sits at 1.82 trillion, according to CoinMarketCap data.

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Author: Peter Siu

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