Italy’s Economy Minister Pier Carlo Padoan has revealed that some central banks have already begun deliberation on the pros and cons of issuing a cryptocurrency. The minister spoke at an event in Milan on January 31, 2018, said that the primary reason banks were considering releasing crypto offerings was to dodge bubbles.
Has the Bubble Popped?
“Some central banks are looking into, and have even considered issuing, cryptocurrencies, to avoid bubbles that explode and do damage sooner or later,” Padoan said while addressing the event hosted by Europe’s largest power utility Enel.
The minister’s remark comes at a time when interest in cryptocurrencies, in particular, bitcoin, is at an all-time high after an unprecedented surge in prices late last year. However, as the price of most of the coins including bitcoin continues its crumble since the beginning of 2018, a sort of unease has crept into the collective psyche of the worldwide investor-community.
Especially so considering that many observers had earlier pointed out that bitcoin’s wild run was just a bubble that would explode sooner or later, leading to a spectacular crash of the crypto market.
Worth noting that bitcoin prices have dropped by more than 100 percent from the all-time high that it achieved in December 2017. As of this writing, the highest valued cryptocurrency in the world was trading at roughly $8,900 per token. The prices of many cryptocurrencies have followed a similar downward trend after Facebook announced that it wouldn’t allow ads for bitcoin and other virtual currencies on its advertising network.
The social media giant was pushed to take this decision after the UK’s finance watchdog had issued a warning about the growing cases of cryptocurrency scams.
Trouble for Italy’s Crypto Miners
In a related development, Enel has announced that it had no interest whatsoever to sell power to cryptocurrency miners. The Italian company issued a brief statement on February 1, 2018, saying that the decision was taken after carefully studying the pros and cons of selling large amounts of power to miners. According to Reuters, the company stated that:
“Enel has undertaken a clear path toward decarbonization and sustainable development and sees the intensive use of energy dedicated to cryptocurrency mining as an unsustainable practice that does not fit with the business model it is pursuing.”
Utility companies all over the world have seen tremendous growth in the demand from miners over the past year. This demand is due in part to large amounts of energy needed to power the machines solving Bitcoin’s complicated math puzzles to validate cryptocurrency transactions and secure the growing network.