EU Cryptocurrency report claims that virtual currencies are permanent financial development. However, it is quite unlikely that they will replace the traditional currencies any time soon.
3 July, AtoZ Markets – The European Parliament’s Committee on Economic and Monetary Affairs has ordered a report regarding the cryptocurrencies. The produced report argues that digital currencies are here to stay. It also states that these digital assets need to be taken seriously by policymakers.
EU Cryptocurrency Report States Virtual Currencies are Here to Stay
The report from the Policy Department for Economic, Scientific, and Quality of Life Policies entitled “Virtual currencies and central banks monetary policy: challenges ahead” has been issued earlier in June. The report was produced specifically for the European Union Parliament. It argues that virtual currencies come as a permanent financial development. They need to be taken seriously by the officials, the report states. The authors of the report explain:
“Policymakers and regulators should not ignore VCs, nor should they attempt to ban them. Both extreme approaches are incorrect. VCs should be treated by regulators as any other financial instrument, proportionally to their market importance, complexity, and associated risks. Given their global, trans-border character, it is recommended to harmonize such regulations across jurisdictions. Investment in VCs should be taxed similarly to investment in other financial assets.”
Cryptocurrencies are a new form of private money.
The analysis further takes a “middle ground between the optimism and excitement of the techno-enthusiasts and advocates of private money and the skepticism or even hostility of those who see VCs as product [sic] of monetary mania or utopia and a convenient instrument for money laundering, fraud, and other illegal activities.”
Speaking differently, the authors think that cryptocurrencies are here to stay. Yet, they note that the digital assets are very unlikely to replace the traditional currencies any time soon.
Furthermore, the authors of the report see virtual currencies as a new form of private money. They write:
“We believe that whether one likes them or not, VCs will remain a permanent element of global financial and monetary architecture for years to come.”
Yet, they mention that virtual currencies do not “have the potential to compete with the sovereign currencies issued by central banks.” They anticipate that traditional currencies will be dominating unless an unexpected global crisis takes place. Moreover, in smaller territories where locals prefer foreign currencies to local, virtual currencies might get a leading role.
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