It was to be expected. Taking advantage of the sector’s errors and mistakes, many members of governments or central bankers to push the benefits of MNBC to the detriment of Bitcoin’s original values, on the grounds that Bitcoin had failed. But is this really the case?
No one asked for his opinion, but Fabio Panetta still has it donated. According to this member of the Executive Committee of the European Central Bank (ECB), the cryptocurrencies are a failureon several levels.
Fabio Panetta: memory in socks
You can make figures say whatever you like. But that’s how our dear Fabio, who takes the floor in June 2023, bases his fine analysis on data that date back (and date back) – by the merest chance – to the worst periods of the 20th century. bear market. This high-flying economist tells us with amazement that holders of cryptos were mostly in loss when the market was at its lowest. Information for which we thank him warmly. Nobody noticed.
Naturally, the current situationeven if it’s not fantastic, has already not much to do with that of last November’s crash. The market recovered quicklyand Bitcoin went from $15,000 to $30,000 in just a few months. This stabilization around the 30,000 euro mark, which we’ve been experiencing for several months now, has enabled historical holders to be majority in gain. A point that Fabio unfortunately failed to mention. But at an age so close to retirement (63), it’s an oversight that we forgive him wholeheartedly.
Fabio also omits, again without rancor on our part, to point out the extent to which the traditional finance sector (virtuous by nature) sheltered investors, during the 2008 crisis or during the more recent US bank failures. According to Fabio, these bankruptcies are part of an argumentative exercise that could begin to border on the limits of bad faith, to the links these banks had with the crypto sector..
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From decentralized payment to centralized betting
According to Fabio Paletta (who will be referred to as Mr. P in the remainder of this article to avoid having his name go up in Google SEO), cryptos have failed to propose a decentralized payment system. In reality, it’s nothing more than a gigantic open-air virtual casino.
Cryptos: purely and solely speculative assets
If we are to believe Mr. P, most crypto investors are in it for the money.t. And it would be dishonest not to agree with him on this point. That said, it doesn’t seem to me that this is a trait peculiar to investors in our milieu. Aren’t those who love dividend stocks or DCA on a World ETF also looking for financial performance?
Yours truly dares to ask a candid question: isn’t the search for performance always the investor’s primary goal? Few of my acquaintances voluntarily invest at a loss, unless they are inundated with public subsidies or tax credits.
Of course, retail investors must be protected. But it is wrong to suggest that crypto assets are only speculative.
On the contrary, in many countries, cryptos enable the population to counter the delirious inflation of the national currency. This is particularly the case in Argentinawhere Peso inflation is completely out of control.
Obvious limitations
If we are to believe the words of Mr. P, the biggest obstacle to cryptos would be the cryptos themselves. And on this point too, we could almost agree. It’s undeniable that the technical limitations of certain blockchains are preventing their mass adoption as a means of direct payment. The surge in fees on Ethereum is a good example, as is the temporary congestion caused by the arrival of BRC-20 assets on Bitcoin.
That being said, it’s a bit quick to overlook the proposed solutions by local players :
- The layers 2 are flourishing on Ethereum to offer users fast and cheaper transactions;
- In the same vein, and in order to encourage local payments, the development of the Lightning Network of Bitcoin cannot be ignored.
All this has been glossed over by Mr. P, who prefers to boast about the difficulties faced by the industry, while avoiding the fact that it is constantly innovating and finding new solutions to the initial technical limitations of both Ethereum and Bitcoin.
The latter deplores the industry’s lack of progress in proposing a truly new means of payment, again omitting the fact that it’s perfectly possible to pay for a coffee using the Lightning Network. What’s more, so much is being done in Europe to facilitate innovation in this field, that one has to wonder why things aren’t moving faster. But never mind!
Fabio Panetta: the death of cryptos
To continue with the clichés, our beloved Mr. P also attacks theself-holding of crypto-assets which would be, according to him, a source of danger.
Here again, we could agree on a more moderate discourse and preach good practices rather than advocating, as the only solution, recourse to the digital currencies developed by central banks.
Terrorist financing: an easy and inaccurate argument
Even though everything points to the fact that cryptocurrencies are not, for the most part anyway, suitable tools for terrorist financing, in that the traceability offered by a public registry is incompatible with the « discretion » required by these activities, Mr P persists.
You will certainly be reassured to learn that yours truly has personally addressed a letter to dear Fabio, Hamas’s statement that it no longer wishes to receive donations in bitcoinsas the latter are too easily traceable.
Hamas aside, many criminals reject Bitcoin on the grounds that it is more easily traceable than fiat currencies.. Yet governments and central banks continue to say the exact opposite. One might almost think that these people are not interested in protecting the public interest, but that would be wishful thinking.
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Blockchain doesn’t solve the main risk factors
For Mr. P, the blockchain has not of great financial interest because it does not enable companies to resolve the main economic risks they face. Credit risk, market risk and liquidity risk are not automatically resolved by the use of crypto-assets.
That said, the use of a hard currency allowed, according to the researcher Saifedean Ammous (author of the excellent books « L’étalon Bitcoin » and « L’étalon fiat »), from get rid of zombie companies that survive only on public subsidiesand thus clean up the market, allowing it to regain its full efficiency.
It is therefore not entirely impossible that Bitcoincontrary to Fabio Panetta’s comments, either part of the solution to a problem that ECB members refuse even to imagine: the inevitable disintegration of paper currencieswhich are based on nothing more than the trust that citizens are required to have in the institutions that manage money. And it’s easy to see why arsonists don’t want to help extinguish the monetary fire they helped start. In the meantime, continues to push ahead with its MNBC project.
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