Cryptocurrencies: What Potential Threats to the Traditional Banking System?
Fabio Panetta, governor of the Bank of Italy and a policymaker at the ECB, has warned of rising risks as banks increasingly engage in the digital asset space.
In the annual report, agreements between traditional banks and digital asset providers are increasing rapidly, creating more links with the traditional financial system.
Mr. Panetta worries that many users may not fully understand the nature of digital assets, which can be easily confused with conventional banking products. This could shake confidence in the credit system if there are large losses.
A typical example is Intesa Sanpaolo bank, Italy's largest financial institution, which bought 1 million euros of Bitcoin in January 2025 and set up a digital asset trading unit from 2023. The bank has already started to conduct spot transactions in cryptocurrencies.
Meanwhile, Spain's Santander bank is also looking at expanding into the digital assets sector, including plans to issue stablecoins and offer cryptocurrency services to retail customers.
Mr. Panetta specifically warned that stablecoins could become a threat to the traditional payment system if global technology corporations strongly promote their use. The lack of a clear legal framework makes the stability and suitability of stablecoins for payments very questionable.
However, he also affirmed that it is impossible to control the development of digital assets with only restrictive measures. According to him, there needs to be a solution that is suitable for the current speed of technological transformation. Therefore, the digital euro project developed by the ECB aims to maintain the role of central bank-issued currencies in the context of increasingly fierce competition with payment instruments from the private sector.
