Cryptos Likely to Fizzle Out as "Load of Nonsense," ECB Council Member Says
Ardo Hansson, governor of Estonia’s central bank and member of the ECB's governing body, sees cryptocurrencies as a “fairy tale story” likely to end in disgrace.
Despite a recent uptick in cryptocurrency markets activity, the European Central Bank (ECB) remains dismissive of digital coins. Speaking at a conference in Latvia, ECB council member and Bank of Estonia governor Ardo Hansson said that cryptocurrencies would probably collapse on account of being a “complete load of nonsense,” Bloomberg reports.
“The bubble has already started to collapse and maybe we should just see how far this collapse goes, and what is left when we’ve reached a new kind of equilibrium. I think we will come back a few years from now and say, ‘How could we ever have gotten into this situation where we believed this kind of fairy-tale story?’” Hansson told his audience.
Despite his apparent conviction that crypto assets are headed for a fall, Hansson said that financial watchdogs must address investor protection concerns in case “grandmothers start investing in that.” He also pointed out that digital coins could be used in illegal activities. In previous statements, ECB officials have already spoken about cryptocurrencies as “dangerous” assets that must be regulated.
This statement follows the hit Estonia took as a result of a $235 billion money-laundering scandal involving the local branch of Danske Bank.
Currently, Estonia is considered a crypto-friendly jurisdiction, having issued over 500 licenses to exchange operators and nearly as many to wallet service providers. This attitude may change in the future as the country prepares more regulations for the crypto market.
Among the most affected in 2019 would be exchanges and token sales, with the Estonian Financial Supervision Authority (FSA) saying it is specifically looking to scrutinize token sales on a per-instance basis in addition to targeting startups providing crypto services.