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Investing.com -- Fabio Panetta, a policymaker at the European Central Bank and the Governor of the Bank of Italy, expressed concern on Friday over the reputational risks banks could face in offering services associated with crypto-assets.
He suggested that potential losses could negatively impact customer trust.
In the Bank of Italy’s annual report presentation, Panetta highlighted the increasing connections between crypto-assets and the conventional financial system.
He pointed out the growing number of agreements between banks and digital asset providers.
According to Panetta, holders of crypto-assets might not fully comprehend their nature and might mistake them for traditional banking products.
This misunderstanding could lead to negative effects on the confidence in the credit system if losses were to occur.
Panetta also touched on the topic of stablecoins, digital currencies designed to have a stable value against a specific underlying currency or asset.
He warned that these could pose a threat to traditional payment methods if large, foreign-based technology platforms chose to promote their use.
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