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The World Economic Forum believes that block chain technology will be rapidly adopted in 2023, it also mentioned several risks related to the digital currency industry. In the article, the risk of bankruptcy of most companies from the market was not ignored, as the market stagnation throughout 2022 was likened to the "dot-com" bubble seen in the first decade of the twenty-first century.
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The World Economic Forum confirmed in its article that financial companies are expanding the use of cryptography and block chain technologies day by day, and banking giant (JPMorgan (NYSE:JPM)) was cited as the biggest example of this.
The forum believes that a ban view would not be the right approach for the cryptocurrency industry, although there have been many negative events. But with the notion that such events can occur in any sector where there is an inflow of money, the forum believes that harmful elements can be eliminated in this sector by encouraging the authorities for responsible use.
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In the joint statement, the US Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency said they are closely monitoring the crypto activities of banking organizations.
“The events of the past year were marked by significant volatility and exposure of vulnerabilities in the digital asset sector,” the statement said.
"The issuance of digital currencies or the holding of digital tokens, which are stored on public decentralized networks, are very likely inconsistent with safe and sound banking practices," the statement added.
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US watchdogs have asked financial institutions to be wary of potential fraud, legal uncertainty and misleading disclosures by digital asset companies.
And American institutions warned banks operating in the United States not to expose digital currency companies to the possibility of transmission of collapses between them.
US regulators have also encouraged banks to take steps to avoid problems in the digital asset market spreading to the broader financial system.
"It is important that risks related to the digital asset sector that cannot be mitigated or controlled are not transmitted to the banking system," the regulators added in the statement.
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European Central Bank member Fabio Panetta said on Wednesday, in an article published in the Financial Times, that unregulated digital currencies fall under what are known as speculative assets; Therefore, it does not provide any benefit on both the social and economic levels.
The European official added that the sole purpose of buying digital currencies is to sell them at a higher price. Thus, it is a form of speculation disguised as an investment asset.
Panetta called for regulating the digital currency market, warning of the possibility of using these unregulated currencies in tax evasion practices, money laundering, terrorist financing and other illegal activities.
In addition, the ECB member emphasized that the cost to society of the unregulated digital currency industry is very high; He also stressed that cryptocurrency investors unknowingly suffered heavy losses last year in light of the decline in the performance of the digital currency market in the same year.
