With the rise in popularity of cryptocurrencies like bitcoin (BTC), many financial institutions are showing interest in these new digital assets.
European Central Bank (ECB) offered a piece of advice regarding the same. In one of the summer courses conducted by the European Parliament, Vice President of ECB Luis De Guindos stated that cryptocurrencies should have the same regulations as other financial assets.
According to Guindos, issuers of crypto assets must meet the same requirements as other monetary assets. As with everything, it’s important to keep a check on terror financing and money laundering. This is because crypto transactions can be conducted anonymously. Unlawful activities can easily be funded through cryptocurrencies.
The Digital Euro
Earlier this year in July, the European Central Bank had announced that it is working on a digital equivalent of the euro currency. The bank has been studying the rise in cryptocurrency’s popularity as a means of cashless transactions. With its own version of the digital euro, the European Central Bank hopes to offer a secure means of payment to citizens across the Eurozone. The digital euro should enter the market in the next five years.
Truth about Cryptocurrencies
Although the central bank is prepping to roll out the digital euro, Vice President Luis De Guindos does not think highly of cryptocurrency. According to him, cryptocurrencies like bitcoin (BTC) are not valid payment methods. The value of crypto assets stems from scarcity and not from their relationship to other forms of assets.
This is among the reasons why the European Central Bank is studying the digital euro. Their main aim is to minimize the potential negative consequences of cryptocurrencies.
