The big news came out from the world largest central bank saying it is too early for ECB Bitcoin regulation. Considering the issue, President Mario Draghi says the virtual currency is too immature to consider as a payment methodology.
27 September, AtoZForex - Eruption in Cryptocurrency market as the European Central Bank (ECB) president came out with startling comments on Bitcoin again. Mario Draghi said in a statement that the central bank has no power to regulate Bitcoin.
It is too early for ECB Bitcoin regulation
Speaking at the European Parliament, he stated:
“It would actually not be in our powers to prohibit and regulate them. We have to ask what effects cryptocurrencies have on the economy. And still far too immature to consider it as a viable payment methodology."
But, Draghi made it clear that there is no way to ban Bitcoin, neither to regulate it when being asked about the bans.
Why is Draghi against Estcoin?
The statement comes after controversy emerged in September over Estonia proposed plan to create national cryptocurrency called "estcoin". However, the rejection of estcoin by Draghi made the world to think why he is against cryptocurrencies? Draghi commented that Estonia would technically be violating the currency laws of the European bloc.
"I will comment on the Estonian decision: No member state can introduce its own currency, the currency of the Eurozone is the euro", he said.
The ECB has no powers over the regulatory control of cryptocurrencies. But they do have control over EU member states wishing to issue their own cryptocurrency, like Estonia. Similarly, the views of ECB vice-president Vítor Constâncio echo those of JPMorgan Chase chief Jamie Dimon, who has described bitcoin as “fraud”.
“Bitcoin is a sort of tulip,” Constâncio said. “It’s an instrument of speculation,” the ECB vice-president said. “But it is certainly not a currency and we don’t see it as a threat to central bank policy.”
Tulipmania erupted in the Netherlands in the 1600s. Which is one of the oldest examples of a financial bubble.
Bitcoin price plunges
The Bitcoin price remained below $4,000 again after a bearish weekend continued to place pressure on the markets. Over the last 24 hours, trading volumes have been smaller than usual. Just $1.1 billion in Bitcoin has exchanged hands over the last day.
Therefore, a sign of muted buying in the China's decision to ban over-the-counter trading. Bitcoin prices are off more than 20 percent from their record highs.
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