Bitcoin Evades Hard Criticism from the ECB

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Bitcoin Evades Hard Criticism from the ECB

Though Bitcoin supporters feel Bitcoin is big, the policy makers in the European Central Bank or ECB do not concur with the sentiments. According to ECB board member Yves Mersch Bitcoin has gained significant value recently, however, a 2012 report that concluded these alternative currencies still remain economically unimportant, is still valid.

Yves Mersch was delivering a prepared speech to a conference on Monday in Rome. Sponsored by the Bank of Italy, the conference attracted banking sector stalwarts who gathered to discuss on the financial issues in the region. At the occasion Yves Mersch said that virtual currencies and for that matter Bitcoin does not pose a risk to price stability or financial stability.

He says that unless Bitcoin and other digital currencies become dangerous for price stability and financial stability, the ECB won’t be stepping in. He also ruled out that it should venture in to protect people from the currency related to speculation and consumer protections as he says that these do not fall in the ECB’s domain.

Mr. Mersch was of opinion that ECB is closely following developments and keeping in touch with other authorities. Though he said that Bitcoin is still unimportant, he added that it is an interesting phenomenon and should not be ignored or dismissed. At the same time he ruled out any influence of Bitcoin on the policies that the ECB makes.

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Several Statutory Warnings Have Been Issued by Central Banks around the World

The ECB and several central banks around the world have been warning the customers against the use of Bitcoin in their financial transactions as it may incur them huge financial losses. This point was put by Yves Mersch as well in the conference wherein he said that some issues like speculation, security vulnerabilities and price volatility pose significant risks to consumers and investors.

Yves Mersch is not alone when he says that there are significant risks involved in Bitcoin and other digital currencies as similar opinion has been shared by the Federal Reserve and the Treasury Department. He said that as Bitcoin has no significance to monetary policies, the authorities in the United States are not trying to regulate it.

Though voices have come from some sections to regulate Bitcoin, the US authorities have not yet paid attention to them. Similar views are now being shared by Yves Mersch who says that there is not much to regulate in Bitcoin unless it becomes so important.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com