Tokens with a large ecological footprint might become heavily scrutinized if institutions follow the European Central Bank's latest proposal.
Fabio Panetta, an executive board member of the European Central Bank , proposed banning crypto assets with a significant environmental impact as part of efforts to address risks.harmonizing taxation around crypto between global jurisdictions could address some of the energy and environment costs around mining and validation. He added that tokens “deemed to have an excessive ecological footprint should also be banned,” referring to proof-of-work assets in a citation.
Panetta added crypto markets were often at risk due to their “incredibly high leverage and interconnections,” citing the collapse of the FTX exchange: “The inadequate governance of crypto firms has magnified these structural flaws. Insufficient transparency and disclosure, the lack of investor protection, and weak accounting systems and risk management were blatantly exposed by the implosion of FTX. Following this event, crypto-assets may move away from centralised to decentralised exchanges, creating new risks owing to the absence of a central governance body.
Crypto-assets have become the bubble of a generation, says Executive Board member Fabio Panetta at the
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