President of European Central Bank: “Not Within Our Power to Prohibit or Regulate Bitcoin”
The president of the European Central Bank (ECB), Mario Draghi, has stated that bitcoin does not fall under the regulatory powers of the ECB. The statement was made in response to a question from the Committee on Economic and Monetary Affairs of the European Parliament.
Mario Draghi made the statement following a question from the European Parliament’s Committee on Economic and Monetary Affairs regarding whether or not the ECB plans to develop a regulatory apparatus pertaining to bitcoin, and what risks cryptocurrencies may pose to the European economy.
According to a story published by Eunews.it, Draghi stated that after considering “the magnitude, user acceptance and impact on the real economy of bitcoin…it would be very premature to consider it as a payment instrument for the future”. The ECB president said that the ECB “has not yet had a discussion” regarding the topic, adding that “it would not be within our power to prohibit or regulate bitcoin”. Draghi also expressed the ECB’s intention to assess the cyber risks associated with bitcoin and cryptocurrencies.
During a Youth Dialogue event at Trinity College Dublin, the ECB President answered a question about whether “new technologies, specifically blockchain, have a role in monetary policy in the future.” Draghi replied:
“we at the ECB are looking into this, and we have now been looking at this for some time. One conclusion is that, at this point in time, the technology is not mature enough yet… to be considered in either central bank policy-making, or in the payments system. We have to look at what progress this technology will make in the future.”
In both events, the President of the ECB emphasized the European Central Bank’s desire to assess the cyber risks associated with new technologies. At Trinity College in Dublin, Draghi described “cyber risk” as the “dominant issue today” in the “realm of digitalization.” He added that “any innovation, like blockchain, will be screened from the viewpoint of how much our exposure to cyber risk is going to go up because we embrace a new technology.”
The ECB president recently rejected Estonia’s plans to launch a state-backed national cryptocurrency, stating that under EU law “no member state can introduce its own currency. Earlier this week, ECB Vice-President Vitor Constancio compared bitcoin with the “tulipmania” that swept across the Netherlands during the 17th century. Constancio also dismissed the suggestion that bitcoin poses a threat to Europe’s financial sector, stating that bitcoin is “certainly not a currency and we don’t see it as a threat to central bank policy.”
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