Bank of Italy Sounds Alarm About Stablecoins

Rome: Bank of Italy Deputy Director General Chiara Scotti on Thursday raised concerns about the risks posed by crypto assets, focusing particularly on stablecoins. A stablecoin is a type of cryptocurrency whose value is intended to be pegged to a reference asset, such as fiat money or another cryptocurrency.

According to Ansa News Agency, Scotti addressed the Parliamentary Commission of Inquiry into the Banking, Financial and Insurance System, highlighting the potential threats stablecoins could pose if not properly regulated. She emphasized that these digital currencies could jeopardize financial stability, market integrity, consumer protection, and the smooth operation of payment systems.

Scotti warned that a loss of confidence in a stablecoin’s ability to maintain its value could trigger panic among users, prompting a rush to cash in. She also pointed out the potential misuse of stablecoins for illicit activities, such as disguising the origins of financial resources for money laundering or evading sanctions.