Mr. Fabio Panetta, a policymaker at the European Central Bank and Governor of the Bank of Italy, expressed concerns on Friday about the reputational risks banks may face when providing services related to cryptocurrency assets.
He argued that potential losses could negatively affect customer trust.
In his presentation of the annual report of the Bank of Italy, Mr. Panetta emphasized the increasing link between cryptocurrency assets and the traditional financial system.
He pointed out the increasing number of agreements between banks and digital asset providers.
According to Mr. Panetta, those holding cryptocurrency may not fully understand their nature and may confuse them with traditional banking products.
This misunderstanding could lead to negative impacts on trust in the credit system if losses occur.
Mr. Panetta also mentioned the topic of stablecoins, a type of digital currency designed to have a stable value relative to a specific currency or underlying asset.
He warned that these currencies could pose a threat to traditional payment methods if large overseas tech platforms choose to promote their use.#FEDDATA $BTC