European Central Bank: Crypto Currently Has No Significant Implications for Monetary Policy
It’s no secret that cryptocurrencies are not looked upon favorably by most major central banks across the world. Some crypto enthusiasts believe that central banks fear that the nascent technology could pose threats to existing monetary systems, while others believe that central banks will begin adopting the technology in the future.
Despite this, a recently released report from the European Central Bank offers a far more bearish assessment of the markets, largely writing off their utility and largely approaching them with what can be defined as a cavalier attitude.
Report: Crypto Does Not Fulfill the Functions of Money
One key aspect of cryptocurrencies that many enthusiast point towards when offering a bullish assessment of the future of cryptocurrency is the fact that in many ways they could fully replace fiat currency, while simultaneously offering users a plethora of benefits.
Despite this, the European Central Bank dismissed this notion in their recently released report, explaining that in their current state, cryptocurrencies pose no tangible impact to the “real economy” and should not sway monetary policy.
“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. 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,” they explained.
Despite this negative sentiment, cryptocurrencies have actually been incurring a massive amount of adoption as of late, and major companies (including the likes of Facebook and possibly Amazon) are looking to implement their own cryptocurrencies in addition to their existing payment infrastructures in an effort to shore up additional profits and to bolster the efficiency of their platform’s infrastructure.
Any Central Bank Digital Currency Must Be Analyzed Separately from Normal Cryptocurrencies
Interestingly, in a section of the report titled “the case for central bank digital currency in the European Union,” the report’s authors do not entirely dismiss the possibility of the central bank launching their own cryptocurrency for internal use.
“The relentless digitalisation of the economy has raised questions as to the suitability of existing forms of money for meeting the new and emerging needs of economic actors. The advent of crypto-assets has fuelled this debate, and it has been suggested that the technology underlying crypto-assets should prompt central banks to issue their own ‘digital currencies’” the report said.
Moreover, the report lays out the criteria for how a cryptocurrency being used by the central bank should be structured, noting that any central bank digital currency (CBDC) should be “designed as a user-friendly risk-free asset that meets the public’s demand for an economy that is both digitalised and safe.”
Although the report concludes that further research and consideration is necessary prior to making any conclusive decisions regarding a CBDC, their openness to the concept, despite their apparent bearishness on cryptocurrencies in general, may prove to be bullish for the technologies in the long-term.
Featured image from Shutterstock.
The post European Central Bank: Crypto Currently Has No Significant Implications for Monetary Policy appeared first on NewsBTC.
Scalability Problem Solved with RIFT Protocol
Tuesday September 10, 2019
Blockchain progression is stopped short with clogged transactions as exemplified by Bitcoin. From 2017, the rising transaction costs, security risks, delays in transfers and losses in trade opportunities made interests on transitioning businesses to...
Ethereum Price (ETH) Could Continue Higher While Bitcoin Struggles
Monday September 09, 2019
ETH price climbed higher recently and settled above the $175 resistance area against the US Dollar. The price is currently consolidating gains and it might continue to rise towards $185 or $190. There is...
The post Ethereum Price (ETH) Could Continue Higher While Bitcoin Struggles appeared first on 12bitplay - Bitcoin Play.
UK Artist Sells 19 Paintings for 490 Bitcoin
Wednesday September 11, 2019
A UK artist has announced that he has sold a collection of 19 paints for a total of 490 Bitcoin. The price fetched for the collection at the time of writing is just less...