European Central Bank: Bitcoin Is Not A Threat But It Needs Monitoring

European Central Bank (ECB) stated earlier today that crypto is not considered as a risk to the financial stability in the Eurozone. However, the ECB recommends that regulation should create a uniform approach for all crypto-assets and this is what we are reading in our altcoin news today.

The ECB even founded an advisory committee named the Crypto-Assets Task Force (ICA-TF) in order to explore the ramifications of the cryptocurrencies in the European Union and the European economy. According to the report from May this year, ‘’Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures’’ found some interesting details.

The Task Force found that the current market size, the cryptocurrencies are not a threat to the economy of the continent or the Euro area monetary stability:

 “Crypto-assets do not fulfil the functions of money and, at the current stage, neither do they entail a tangible impact on the real economy nor have significant implications for monetary policy.”

In their findings, it says that it would be much more different if the crypto market was larger. The Task Force also noted in the report that the European Central Bank is advising the regulators across Europe to prepare when the crypto markets get bigger. Also, the report finds that the ‘’very low number of merchants that allow the purchase of goods and services with bitcoins indicates no influence of the most prominent crypto-asset on price-setting’’ and notes that the influence of digital assets and cryptocurrencies could grow.

According to the latest cryptocurrency news, the reports highlight that the potential for cryptocurrencies to become disruptive for the EU economy could be possible if their use becomes more widespread:

 “… important that the ECB continue to monitor the crypto-assets phenomenon, raise awareness and develop preparedness for any adverse scenarios, in cooperation with other relevant authorities.”

The Task Force proposes that the lack of a regulatory approach to cryptocurrencies has to be urgently addressed. The European Central Bank has been dismissive of cryptocurrencies previously when president Mario Draghi declared:

 “Bitcoins or anything like that are not really currencies, they are assets. A euro is a euro – today, tomorrow, in a month, it’s always a euro. And the ECB is behind the euro. Who is behind the cryptocurrencies? So they are very, very risky assets, the value of which oscillates – as you’ve seen – wildly.”