Cryptocurrency ‘Conducive to a Systemic Crisis’ (New Form of Gambling IMAO)
This article appears in the July 18, 2025 issue of Executive Intelligence Review.
[Print version of this article]
Italian Market Regulator: Cryptocurrency ‘Conducive to a Systemic Crisis’
The Italian economist, banker, former government minister, and just-retired chair of Italy‘s stock exchange supervisory authority CONSOB (National Commission on Society and Markets), was interviewed about cryptocurrencies by Claudio Celani of EIR. Professor Savona was the Chair of CONSOB from Feb. 5, 2019 until June 20, 2025.
In his farewell speech as CONSOB Chair, Professor Savona reiterated his earlier warning that cryptocurrencies pose a danger to the monetary system, analogous to that of the financial derivatives which were the drivers of the 2007-08 Global Financial Crisis. He compared the fantastic expectations generated by such new financial products to Pinocchio’s Field of Miracles in the famous story, where coins could be planted and would supposedly, immediately grow coin trees.
In his interview with EIR, Professor Savona explained the serious risks represented by the legalization of cryptocurrency stablecoins pegged to the U.S. dollar, being authorized through the GENIUS Act legislation passed by the U.S. Senate and under consideration in the House of Representatives. He described the several categories of crypto tokens, which have “one common element—decentralized electronic accounting—but have different functions and offer different risks and opportunities; it must be understood that only one type of token is supposed to be a currency—i.e., a means of exchange and a store of value—and that, only under precise circumstances.
Cryptocurrencies perform the dual function of currency and financial asset and become integrated with cryptoassets, as when a portfolio includes both traditional securities and cryptocurrency futures, indices, exchange-traded funds. Without this distinction in mind, it is impossible to understand why cryptocurrencies create problems for monetary and financial stability.
One of the main reasons is that they are created (or ‘mined’) by private individuals on computers and are not supervised—there is intervention only in cases of fraud—while all other [currency assets] are issued with [national—ed.] authorization and therefore have a known and supervised debtor.
This means a juridical person who is there, “provided that the accounting is transparent,” to exchange the asset for money. Professor Savona explained that private cryptocurrencies are simply created if there is demand for them,
… whereas the quantity of national currency is predetermined by the monetary authorities, and the financial markets can demand a premium (spread) as supply increases.
Cryptocurrencies and cryptoassets create a market environment conducive to a systemic crisis, similar to that caused by the growth of complex derivatives in 2008. Ignorance of how the market works periodically fuels a craze for a real asset or financial instrument that allows easy gains. In Amsterdam [in the 16th Century—ed.], the value of a tulip bulb reached that of an apartment in the city, as happened with Bitcoin. When people realize that the value is a speculative bubble, panic sets in and everyone tries to recover their invested savings, inevitably leading to a crash in the sector, which spreads to the entire economy.
Individuals who manage their own savings, or banks that manage other people’s money, think about their own advantages and not about the stability of the system. [That] task is carried out by the state institutions delegated for this purpose, from governments to central banks and supervisory authorities. If they legitimize the use of cryptocurrencies, as is happening, they are not fulfilling their task, and are becoming part of the problem.
Professor Savona pointed to an important distinction: The United States has banned the creation by the Federal Reserve Bank of an official cryptocurrency, the digital dollar, and has legitimized certain cryptocurrencies, while China has put an official digital yuan into circulation, to counter cryptocurrencies. He believes that “geopolitical competition between them will only end if the two powers reach an agreement on fundamental issues. Unless there is a new international monetary and financial agreement, such as the one reached in 1944 at Bretton Woods, the European Union [EU] must propose its own solution. The EU must create a safe digital asset to manage the demand for liquidity for contingent or precautionary reasons.
