Cryptocurrencies are back in the crosshairs of Paolo Savona. The president of the Consob, who spoke at the fifth edition of Milan Capitals, has issued a stark warning against the growing influence of digital currencies, accused of destabilizing global monetary balances.
In a context that the professor defined as one of "apparent calm" for the markets, marked by wars, trade tensions and geopolitical fragmentation, Europe "finds itself fighting not only with a monetary policy that wants the depreciation of the dollar, but also with a new coin that wants an alternative instrument to the dollar".
A “new coinage”, that is cryptocurrencies, which according to Savona represent a systemic risk factor and a direct challenge to the international economic order.
From the birth of Bitcoin to its American legitimacy
Savona has retraced the genesis of digital currencies, born in 2008 "in a moment of mistrust in financial institutions", when an anonymous inventor, Satoshi Nakamoto, gave birth to Bitcoin. Since then, "thousands of coins have been created through imitations", until "the United States they did not legitimize five cryptocurrencies, including Bitcoin, as reserves of the US government debt, creating the legal basis for offering cryptocurrencies in exchange for dollars.”
A step which, in the opinion of the president of Consob, marks a point of no return since Washington has provided legal cover to a new alternative monetary instrument, while "China has chosen to move in the opposite direction, banning private cryptocurrencies and focusing on the digital yuan." Europe, meanwhile, remains torn between the need to innovate and the need to preserve stability.
Stablecoins, the hidden danger
Al Stablecoins are also at the centre of Savona's concerns, cryptocurrencies theoretically pegged to stable reserves. "The European government has legitimized the use of a particular cryptocurrency, called a stablecoin. But stability comes from the instruments one purchases," he recalled.
The problem, according to the head of Consob, is that "the real risk in this sector can come from outside." The warning echoes what was already reported by Financial Stability Board, who warned against Europe's dependence on non-EU platforms and infrastructure: cryptocurrencies "owned by Europeans are controlled by non-European entities," with the risk of importing financial instability. This fragility, if left unaddressed, could explode into a sudden crisis, "amplifying the possibility of capital flight and a rush for reimbursements."
“A monetary duopoly that threatens savings”
Il real danger, according to Savona, is the birth of a "monetary duopoly" between the dollar and digital currencies, a competition that could overwhelm private savings. "I'm quite worried about this monetary duopoly," he confessed, calling the scenario "a dangerous currency war" that affects "the roots of society."
The alarm concerns above all the small Italian savers, “those who allow families to survive difficulties,” and who risk finding themselves exposed to a system in which the boundaries between finance, money, and speculation are becoming increasingly blurred.
Hence the request for strengthen supervisory institutions and redefine the role of monetary authorities, “to wage war, specializations must change and therefore monetary authorities must have rigid, precise tasks”.
The European Way: A “Stable and Sovereign” Digital Euro
How to face the threat? Savona proposes a specific path: "set up a single electronic euro, supported by a security tool that guarantees stability", only in this way, "can we create a very powerful and competitive tool". A true digital euro, therefore, not a simple technological update but a European currency capable of withstanding the challenge of the American dollar and cryptocurrencies"There are specific services within cryptocurrencies that deserve protection," he added, "but we need legislation that allows them to be offered without exploiting their increased value to attract investors with symbolic securities."
Savona then evoked the need for a new global governance of digital currencies, but with a note of realism, “the time to call for a new Bretton Woods that establishes rules on cryptocurrencies has already passed, and since there is no new Bretton Woods, we must prepare for this situation.”
In other words, Europe must move forward on its own, equipping itself with adequate rules and tools to avoid being overwhelmed by a monetary transition already underway.
