European Central Bank and New Claims about Cryptocurrencies
Although many banks have accepted the existence of cryptocurrencies and their activity, some of them look at them suspiciously. In spite of its high popularity and value, Bitcoin, the king of cryptocurrencies and the first to step in this field, has recently confronted with some strange claims from the European Central Bank (ECB). It believes that Bitcoin is not money, but it can be introduced as an unreliable currency, while this currency has succeeded in reaching 3919 after passing a falling market and has been the most valuable cryptocurrency among currencies since its emergence.
European Central Bank has announced that despite being popular in Europe, Bitcoin is not money and as the central bank, they have a patent to print, decrease or increase its value. In #AskECB tweeter campaign, this bank has intended to attend to the people’s worry; however, finally, the age of this campaign ended with an official statement.
Bilateral and consecutive confessions show a clear image of the relationship between the world and cryptocurrencies and bank elite. Decentralized currencies form a rebellion against corrupt governments and the bank elites such as cryptocurrency exporting elites who have full uncontrollable power on the people’s money.
Moreover, proponents of the cryptocurrencies are against banking elites which consider cryptocurrencies a fraud, scam and illicit forms of the money. The governments and banks which label these currencies as Dark Web ignore encrypted assets and its growing popularity.
Peter Praet, the executive board member and the chief economist at the Central Bank of the Union, emphasized the main discussion about Bitcoin nature. He stated that although European Central Bank confessed that Blockchain technology is important in many industries, cryptocurrencies cannot be recognized as money.
Other banking giants like Jamie Dimon, CEO of JP Morgan, and Warren Buffet, CEO of Berkshire Hathaway have such ideas too.
Why Does the European Central Bank Resist?
In spite of the fact that many banks have moved toward cryptocurrencies or at least have recognized them, why does European central bank resist? One of the reasons which cause banks not having a tendency toward cryptocurrencies is the issue of insecurity. Since the cryptocurrencies have become popular among people, there have been reports of hacking many cases of the users’ accounts. The other charge against cryptocurrencies is that the holders’ identity is hidden and it can increase financial crimes such as money laundering and fraud plans. Therefore, the reasons of disinterest of the banks in cryptocurrencies look compelling; however, all these problems face a solution, and it is “regulations.”
The World of Cryptocurrencies Requires Regulations
A while ago, the UK’s treasury committee assimilated the world of cryptocurrencies to “wild west” which highly requires law enforcement and regulations. From the one hand, this committee has announced that the existence of laws and regulations can introduce England as the spot to trade and develop cryptocurrencies. These regulations encourage banks to enter the world of cryptocurrencies in a secure atmosphere and enjoy themselves and their customers from common interests of this technology.
Cyber-attacks to steal the users’ cryptocurrencies take place when these currencies are kept in centralized exchanges. In case the laws are enforced in storing cryptocurrencies and giving necessary instructions to the holders of cryptocurrencies, more secure atmosphere will be provided for it.
In fact, cryptocurrencies technology is based on Blockchain which can be assumed greatly valuable for banking systems due to the lack of changeability and exchangeability. The blockchain is one of the securest developed technologies which can be an impediment for money laundering and other financial frauds. In this system, every amount of value transacted can be traced in each stage, and it will make money laundering and fraud very difficult for the criminals. Supporting regulations and law enforcement ensure cryptocurrency holders that there is supervision on their assets like other currencies and assets. Hence, Blockchain can play a key role in decreasing organized frauds. On the other hand, cryptocurrencies and Blockchain technology can avoid financial corrupt and the banks’ frauds. Cryptocurrencies and Blockchain technology can avoid accidents such as stealing the people’s deposit and money by some managers of financial institutions.
All in all, we can be sure about the European Central Bank’s motivation and the reason for its reaction to these currencies, but most of the banks hide themselves behind this excuse that they are institutions under the dominance of traditional financial system and it is necessary to apply a conservative approach toward cryptocurrencies. Therefore, the main reason for the European Central Bank is not clear for anyone.