Cryptocurrency Regulation is Not a Top Priority: ECB
ECB’s chief supervisor says the central bank will keep an eye on cryptocurrencies, but is not rushing to lay down regulations just yet.
While the European Central Bank (ECB) is prepared to step in if required, the regulation of cryptocurrencies is currently not a key concern.
Speaking to CNBC, ECB’s chief supervisor Daniele Nouy said the ECB intends to keep an eye on cryptocurrencies, particularly new developments in the space, such as the listing of Bitcoin futures contracts on U.S. stock exchanges (CBOE and CME both launched Bitcoin futures contracts in December last year).
However, she added that at the moment, there was little to no interest among European banks in regards to cryptocurrencies, and the ECB was not rushing to put a regulatory framework in place.
“We scrutinize the issue in a regulatory perspective, we are ready to do something if it was needed, but so far it's not exactly very high on our to-do list.”
Cryptocurrency regulation is a hot topic at the moment. China’s ruthless crypto crackdown, coupled with South Korea’s tightening of crypto regulations, created panic among investors and traders, leading to a market crash which saw Bitcoin plunging to a low of $6,000 while the crypto market lost more than $550 billion of its value.
Some of the key concerns cited by regulators in regards to cryptocurrencies include the protection of investors in an unregulated market, and the possibility of cryptocurrency usage in criminal activities such as fraud, money laundering, and terrorism financing.
However, positive news has emerged from the United States and Singapore. At a cryptocurrency-focused U.S. Senate hearing this Tuesday, the heads of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission outlined their aim to nab bad actors without imposing extensive regulations on the crypto space. Singapore, meanwhile, has categorically stated that it has no intention of banning cryptocurrencies.
Following the Senate hearing, the crypto market has shown signs of recovery, with Bitcoin clawing its way back above $8,000 as other cryptocurrencies also start to stabilize.
Further discussion on cryptocurrencies is expected at the upcoming G20 summit in March this year, where France and Germany are preparing to present a joint proposal for cryptocurrency regulation.
However, the ECB does not appear particularly interested in imposing checks on the crypto market, at present. ECB chief Mario Draghi, while addressing the European Parliament in Strasbourg earlier this week, said that although the ECB was looking at any potential financial stability risks posed by Bitcoin and its peers, European banks were simply not interested.
“We are not observing a systematically relevant holding of digital currencies by supervised institutions. Actually, credit institutions... are showing limited appetite for digital currencies, like Bitcoin.”