While many global regulators exercise caution in respect to Bitcoin, others believe it might be illegal. As for the EU bloc, ECB Official says Bitcoin threatens economy. How will the situation unfold?
3 January, AtoZForex – The Executive Board member of the European Central Bank, Yves Mersch, has informed the public about his opinion in regards to the king of all cryptocurrencies, Bitcoin. More specifically, the ECB official has warned the public against Bitcoin, referring to the speculative nature of the digital currency.
ECB Official says Bitcoin threatens economy
Yves Mersch has warned the public about the possibility of a threat to economic stability that Bitcoin can pose. According to the ECB official, the digital currency is capable of weighing on the stability of EU economy in case financial infrastructure institutions get involved with the cryptocurrency.
He has also mentioned the trading volume of Bitcoin, stating that currently, it is relatively low. Therefore, the Executive Board member does not see the digital currency as a threat now. However, he has cautioned:
"What concerns me most, is when financial market infrastructures such as stock exchanges enter this business. That poses a major threat to financial stability."
Furthermore, Yves Mersch has highlighted the “speculative hype” around Bitcoin. He stated that this emerges as one of the key reasons for concern in regards to the investor safety. Mr. Mersch has also stated that "individual investors are free to gamble." However, he added that they should be aware that ECB won’t protect them in case things go wrong.
EU Instant Payments Technology
Yves Mersch’s remarks appear almost a month after he has stated that banks would need to implement "instant payments" at earliest. This initiative would bring the alternative for innovation brought by the Blockchain closer.
Also, in 2016, Mr. Mersch has stated that this phenomenon technology has all the chances to disrupt the card-driven payments. He has mentioned that card-based solutions have "the potential to further boost card usage by replacing cash payments.”
Mario Draghi, the president of the European Central Bank (ECB) believes that cryptocurrencies have too little influence to regulate them. He expressed his opinion speaking to the European Parliament, stating that digital currencies are not a threat.
Pointing out the relative insignificance of the cryptocurrencies, Mario Draghi stated that they do not appear as a threat to the ECB Euro control. He also added that there is a lack of adoption of digital currencies within the 27-member economic union. Thus, according to Mr. Draghi, cryptocurrencies’ influence on the economy is limited.
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