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The European Central Bank (ECB) recently published a paper titled “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures,” in which the European Central Bank President states that Bitcoin is not a currency and is, therefore, no threat to monetary policy or the real economy.
Bitcoin Is No Threat to the Euro, Says ECB President
Per the report, the ECB states that cryptocurrencies and Bitcoin are not currencies, because their level of acceptance from merchants is very limited and they are far too volatile to be used as a currency. The ECB views Bitcoin and crypto as investable assets that pose no threat to fiat currency.
As stated by ECB president Mario Draghi earlier in May, he said:
“Cryptocurrencies or 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.”
However, as previously reported by IIB, the ECB is closely monitoring the development of stablecoins, which are pegged to physical assets such as fiat currencies. According to the ECB, stablecoins could offer a less volatile digital currency if collateralized by central bank reserves.
Do you think the ECB is right to think that Bitcoin is not a threat to fiat currencies like the Euro? Let us know what you think in the comment section below.