The Cryptocurrency
Cryptocurrencies emerged in 2009 with Bitcoin, as an alternative to traditional finance. These digital assets are not issued by any central bank or government and are not legal tender. Instead, they are generated through cryptographic algorithms on distributed networks known as blockchains. Their value is highly volatile and entirely market driven. Cryptocurrencies are largely speculative assets, vulnerable to fraud, manipulation and hacking, with limited adoption as a true means of payment. Despite early promises of decentralization and transparency, the crypto ecosystem is often opaque and dominated by a few key platforms and intermediaries.
The most important crypto tokens are: 1) Bitcoin (BTC): the original and most well-known cryptocurrency with a Market share 50–52%. It remains very volatile. 2) Ethereum (ETH): used for smart contracts and decentralized applications (DeFi, NFT) with a market share of about 16–18%. It is the most used platform to develop other cryptocurrencies.
Crypto Frauds, including Ponzi schemes
As cryptocurrencies continue to gain attention, scams, thefts and fraudulent schemes are spreading just as rapidly, often leaving behind severe financial losses. These digital assets, while promising innovation, are also fertile ground for deception. Their high volatility and the lack of regulation in many countries make it difficult for victims to recover stolen funds, especially when entire platforms vanish overnight.
The collapse of FTX – one of the world’s largest cryptocurrency exchanges – in November 2022 refers to the dramatic implosion that shook the entire crypto industry. Once hailed as a trusted global exchange, FTX crumbled when it was revealed that customer funds were being misused by its sister company, Alameda Research. The scandal resulted in over $8 billion in losses and ended with the conviction of Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, who was sentenced to 25 years in prison for fraud and conspiracy related to the company's demise.
Before that, the OneCoin saga had already exposed the dark potential of crypto hype. Marketed as a revolutionary digital currency, in reality, cryptocurrency OneCoin was completely invented, and the business was based on a mere Ponzi scheme, disguised as a multi-level marketing operation. Its leader, the Bulgarian Ruja Ignatova —nicknamed the “Cryptoqueen”—disappeared in 2017 and remains at large. The scam cost investors around $4 billion and became a global symbol of unchecked crypto fraud. Since 2022, Ruja Ignatova has been included in the FBI’s Most Wanted Fugitives list.
China’s PlusToken was another cautionary tale. Promising high returns for crypto deposits, the project attracted over two million users. When the scheme collapsed in 2019, more than $3 billion in digital assets had vanished. Although some arrests were made, most of the stolen funds were never recovered.
These aren’t isolated incidents. Across continents, crypto scams share common traits: unrealistic promises of guaranteed profits, vague or non-existent regulatory frameworks, endorsements by fake or unaware influencers, and elaborate systems that make it hard to withdraw funds or even identify who’s behind them. Transparency is often missing, and technical complexity becomes a shield for bad actors.
From offshore havens to unsuspecting towns in Europe, the trail of digital deception is long and still growing. In this uncharted financial frontier, caution isn’t optional, it’s essential.
Stablecoins: Private Money in Search of Stability
Stablecoins occupy a middle ground between unregulated crypto and traditional finance. Issued by private entities, these digital tokens are typically pegged to stable assets—most often the U.S. dollar—with the goal of minimizing volatility. The most prominent examples, Tether (USDT) and USD Coin (USDC), are widely used to move funds quickly across trading platforms. However, their apparent stability is deceptive: questions about reserve transparency, lack of regulatory oversight, and the potential for systemic risk make stablecoins a grey area in urgent need of regulation. As they grow in size and significance, they challenge the boundaries of monetary policy and financial stability.
According to the Bank for International Settlements (BIS) it is impossible to support a monetary system based on stablecoins because payments in stablecoins cannot be accepted by everyone without reservations, unlike those with fiat currencies (for example the euro, the dollar, the pound or the yen), which are opposed to a safe asset that acts in the public interest, namely the reserves of a central bank. In addition to the so-called “uniqueness,” stablecoins also do not meet the criterion of “elasticity,” or flexibility in the supply of money to immediately satisfy large-value payments, “without disruption”. Stablecoin issuers do not guarantee this “elasticity,” while central banks do.
CBDCs: The State’s Digital Answer
Central Bank Digital Currencies (CBDCs) are still largely in pilot or development stages, with no G7 country having fully launched one to the public. Unlike cryptocurrencies and stablecoins, CBDCs are public money, issued and guaranteed by central banks. They are not meant to disintermediate but rather to reinforce the role of central authorities in the digital age. CBDCs aim to offer a secure, centralized, and traceable alternative to cash, and can serve as tools for monetary policy implementation and anti-evasion efforts. Their adoption could reduce physical infrastructure costs and increase payment system efficiency. The digital euro, currently in development by the ECB, and China’s e-CNY project, already in advanced testing, are key examples.
The ECB plans to launch the digital euro by 2029, a central bank digital currency (CBDC) guaranteed by the ECB. The digital euro represents a fundamental piece in strengthening European digital sovereignty. Its introduction could create new opportunities to develop payment networks integrated with this digital currency.
Conclusion
In the race toward digital money, three models have emerged: cryptocurrencies, stablecoins, and central bank digital currencies. Each follows a different logic—speculation, convenience, and institutional trust. While crypto and stablecoins have sparked innovation, it’s CBDCs, backed by central banks, that stand out as the most secure and potentially game-changing tool for everyday payments. The future of money may be digital, but trust will remain its cornerstone.
