ECB: crypto task force is Bitcoin-skeptical (yet) see little need for action

the The crypto task force of the European Central Bank has published a Report on the regulation of crypto-currencies. In it, you certify Bitcoin & co. the Status of high-risk forms of investment. This crypto-currencies represent from the point of view of the analysts, no serious risk for the Euro. The Take crypto-regulatory measures for the time being not urgent, so the evaluation of the experts.

By Christopher clover
21. May 2019BTC$7.896,00 1.70%part Facebook Twitter LinkedIn xing mail

The crypto market is too small to have a significant impact on the real economy – so one of the observations that employ the cryptographic task force of the ECB in a recent Report about Bitcoin & co. is.

at The present time do not meet crypto-Assets, functions of money, and you have no tangible impact on the real economy have a significant impact on the monetary policy.

The authors of the report with the title "crypto-Assets: implications for financial stability, monetary policy, and payment and market infrastructures" does not exclude, though, that a crypto-currency one day, can be used as money; however, it lacked this so far, especially at points of acceptance for Bitcoin & co.:

In principle, could impact on the monetary policy, if crypto-Assets to be a credible substitute for cash and deposits should be developed. The allegedly small number of dealers who enable the purchase of Goods and services with Bitcoin, pointing out that the most prominent of crypto-Asset that has no influence on the pricing.

crypto currencies: (Still) no competition for Cash

Since crypto-currencies (not yet) a competitor to cash and Bank Transfers are, whether your monetary policy's impact with that of other Asset markets is comparable. Therefore, the crypto-Task-Force-for-First-sees no urgent need for Regulation. Nevertheless, it is important to keep the crypto market due to its volatile developments in the regulatore eye. In particular, the prospect of the Central Bank, given Stable Coin could have long-term impact on the monetary policy of the ECB.

at the same time, the dynamics of crypto-equipment justifies, including the development of Stable Coins, continuous Monitoring. In this context, it remains to be seen whether algorithmic stablecoins can actually provide the very significant reduction in price volatility [...]. In contrast, Stable Coins might be less volatile if the coins would be secured, for example, by Central Bank reserves. Such collateral leads to an additional demand for Central Bank reserves, which could have an impact on the monetary policy and its implementation.

After all, the authors of the report themselves admit that such would centrally represent Bank-Coin no real crypto-currencies:

Such a secured Stable Coins are not crypto-Assets in the sense of this paper.

A crypto-Asset in the classical sense always implies decentralization. So, for example, the Bitcoin network has no Central instance, which could capture a regulatory gripper. The have also recognized the authors of the report:

According to the current state of the legal situation, the room for manoeuvre of the authorities is limited; in addition, regulatory intervention through the lack of Governance and distributed architecture of crypto makes it difficult to Assets in addition.

ECB chief Mario Draghi has already expressed itself in 2017 skeptical with regard to the adjustability of Bitcoin.

So far, So unregulated?

So far, So unregulated. With one exception: The fifth anti-money laundering Directive of the EU for providers, the "exchange services between virtual currencies and Fiat currencies have to offer", as well as Custody Services and K Wallets. So can you imagine, for example, the Bitcoin exchange Binance with their main business in unregulated realms, because it offers in Europe, there is no Fiat-to-crypto exchange pairs.

in Principle, pure (centralized) crypto-exchanges could be in a similar regulatory framework in focus, like their counterparts in the traditional financial market.

However, a strict regulation of so-called Gatekeeper such as Bitcoin could bring the stock to unintended consequences, the concerns of the task force. One of these unwanted side effects could be a greater demand for decentralized crypto-exchanges (DEX); and this could be even more difficult to regulate than their centralized counterparts.

The crypto task force of the ECB comes to the conclusion that the crypto market is not large enough, so that specific regulatory measures to be taken. Nevertheless, it is important to monitor the market for digital Assets continue to.

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