European Central Bank Sees No Current Threat from Cryptocurrency

The current European Central Bank president has come out and said that it is his belief that there is no threat currently posed by cryptocurrencies when it comes to the financial system that is currently dependent on the central banks.

He made this statement when he was attending the Monday sitting of the European Parliament. Mario Draghi is the ECB President and he has been downplaying the impact that different cryptocurrencies are having when it comes to the traditional bank system that is centralized in the form of central banks. He makes the claim that the current levels of adoption and impact of them are overly ‘limited.’

He says that these digital currencies in his opinion will not be of any cause for concern when it comes to the control the central bank has when it comes to the money supply of the European Union. This came from a Reuter’s report last Monday following this meeting.

He did state that he does not believe that digital currencies pose a risk yet for the central banks, so he is not saying that they will never pose a threat.

He made these comments just under a week after a member of the ECB council named Ewald Nowotny revealed that certain central bankers and legislators had plans regarding the regulation of digital currencies in the European Union.

He is the current governor and president of the central bank in Austria and he referenced China’s extreme levels of regulation when it came to digital currencies and how this has led to the closing of bitcoin exchanges and a total ban on initial coin offerings in the country.

He has talked about his concerns in previous statements, saying that he believes bitcoin and other cryptocurrencies do not fulfil the role of a currency as they are too unstable.

A few weeks ago the vice president of the ECB Vitor Constancio stated that cryptocurrencies are a “misnomer” and that they will never come to replace the traditional fiat currency system.

Draghi was a previous head of the central bank in Italy and he does not believe that there is sufficient maturity in cryptocurrencies to consider regulations for them. He did note that innovations of this kind should be encouraged due to the benefits they may provide while at the same time as they are being critically assessed by the relevant risk authorities.

Draghi was asked back in October if there were any thoughts about putting regulations on cryptocurrencies after a meeting of the European Parliament’s Committee on Economic and Monetary Affairs.

He stated that it was not within the powers of the European Central Bank to prohibit or regulate the world of bitcoins. Bitcoin is decentralized for a reason and any attempt to try and clamp down on this and create a centralized element to it would not go down well across the world and inherently it would not be fruitful.

Mario Draghi and the ECB have enough on their plate at the moment it seems and they are happy to give bitcoin and other cryptocurrencies a free reign for the foreseeable future.