Date
12 December 2017
ECB President Mario Draghi addresses the European Parliament's Economic and Monetary Affairs Committee in Brussels on November 20. Photo: Reuters
ECB President Mario Draghi addresses the European Parliament's Economic and Monetary Affairs Committee in Brussels on November 20. Photo: Reuters

Digital currencies pose no threat to ECB, says Draghi

Digital currencies do not pose a threat to the European Central Bank’s hold on money supply, as adoption of the virtual units — and their impact on the economy — is limited in the eurozone, the central bank’s chief said.

“We think that all this is pretty limited. So it’s not yet something that could constitute a risk for central banks,” Mario Draghi told the European Parliament on Monday, Reuters reports.

Draghi’s remarks came days after Ewald Nowotny, National Bank of Austria president and an ECB governing council member, said lawmakers and central bankers are discussing whether they should intervene to regulate cryptocurrencies.

While he cited China’s recent shutdown of bitcoin exchanges, Nowotny however played down the possible risks cryptocurrencies such as bitcoin represent to the wider financial system.

“This market is not so large, so it cannot create financial instability,” he said.

Last month, Draghi said the ECB would not regulate the space, telling the media that he saw bitcoin as being too immature to regulate.

He followed up by noting that people should “cherish” innovations in the financial sector, including cryptocurrencies, while guarding against any potential risks.

Draghi also said in September that he does not think the ECB can regulate bitcoin, telling a European Parliament panel that regulating cryptocurrencies falls outside the scope of the bank’s powers.

Chinese authorities in September ordered Beijing-based cryptocurrency exchanges to stop trading, in a move aimed at limiting financial risks surrounding the highly speculative market.

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BN/RC

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