ECB Official Warns Crypto Adoption by Banks Could Erode Public Trust

European Central Bank policymaker Fabio Panetta has issued a stark warning about traditional financial institutions’ growing involvement with cryptocurrency assets. Speaking at the Bank of Italy’s annual report presentation, Panetta highlighted the potential for consumer confusion when banks partner with crypto firms, particularly regarding risk profiles and safeguards.

The concern centers on retail investors potentially conflating volatile digital assets with protected banking products. "Crypto-asset holders might not fully understand their nature and conflate them with traditional banking products," Panetta stated, noting this misapprehension could trigger wider fallout. A loss event in bank-associated crypto products might damage confidence across the entire credit system.

This caution emerges paradoxically as European banks deepen crypto engagements. Institutions are launching custody services, trading desks, and blockchain-based products despite regulatory uncertainties. The ECB’s intervention suggests mounting unease about financial stability risks from uncontrolled crypto-bank integration.