Italian Consob: Paolo Savona against privacy cryptocurrencies

The Chairman of the Italian CONSOB, Paolo Savona, has taken a strong stand against privacy cryptocurrencies. 

In fact, during his speech at Consob’s annual meeting with the financial market, he had contemptuous words about these new financial technologies. 

He said: 

“The existence of some crypto assets, identified as Bitcoin, or Coin, or Stablecoin, or Token, has made us lose the sense of what ought to be done: to unify and modernize payment systems, bringing them back into the legal system to guarantee the stability of purchasing power and to be the only legal means of debt relief”.

But in reality, the attack was much more targeted. In fact, at a certain point he added: 

“There is still hesitation in determining that private and public cryptocurrencies cannot coexist because they would cause confusion, if not disaster. There are major problems of lack of regulation for the financial crypto assets which, after the not exactly brilliant ICO (Initial Coin Offering) experiment, seem to be headed towards tokenization, a monetary-financial hybrid which lacks public regulation”.

In other words, he is de facto asking that private cryptocurrencies be outlawed, so as not to coexist with public ones. 

The motivation behind this reasoning seems to lie in these other words: 

“Within this alternative framework, the protection of savings would be decidedly more difficult, if not impossible, because the competition between public currencies, which seek stability, and private currencies, which seek profits, would alter the functioning of the current institutional architecture, which already experiences the close dependence involving monetary, financial and fiscal management”. 

In other words, the problem seems to be the competition, which is precisely the reason why, along the lines of what Nobel Prize winner Friedrich Hayek wrote in 1976 in the famous book “The Denationalization of Money”, Bitcoin was born. 

According to Hayek, instead of a national government issuing its own specific currency, forcing all members of its economy to use it, private companies should also be allowed to issue their own forms of money. Savona is actually arguing the exact opposite. 

He also argues that the only good cryptocurrencies would be public ones (i.e. state currencies), without having probably understood that no state cryptocurrency can be decentralized. In other words, there cannot exist a real public cryptocurrency, but only possibly centralized fiat currencies managed with technological instruments partly derived from real cryptocurrencies. 

He then explicitly mentions the Chinese state “cryptocurrency”, which technically is a Central Bank Digital Currency (CBDC), thereby revealing the misunderstanding he fell victim to. 

It must be said, however, that the Consob, i.e. “The National Commission for Companies and the Stock Exchange”, is a public authority specifically dedicated to the protection of the investors, therefore, Savona speaks as the chairman of a body whose principal objective is to defend investors also from potential fraud. 

Seeing that in the crypto sector, unfortunately, financial scams are frequent, it is possible that behind Savona’s hostility to cryptocurrencies there is precisely the need for Consob to fight against these countless scams to defend investors.