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Regulate Bitcoin? 'Not The ECB's Responsibility,' Says Mario Draghi

Mario Draghi, president of the European Central Bank, has said it’s not his institution’s job to regulate cryptocurrencies.

As part of the ECB’s #AskDraghi video series, the former Italian central banker said he has seen many users on Twitter ask if the ECB would regulate or even ban bitcoin.

In response, he said:

“It’s not the ECB’s responsibility to do that.”

Draghi also discussed whether he would recommend purchasing bitcoin in response to a question from a college student.

He indicated he would think “carefully” about buying bitcoin, explaining that he does not see it as a currency. While the euro’s value is stable, he added, “the value of a bitcoin oscillates wildly.”

Also hitting out at cryptocurrencies’ decentralized nature, he continued: “The euro is backed by the European Central Bank. The dollar is backed by the Federal Reserve. Currencies are backed by the central banks or their governments. Nobody backs bitcoin.”

This is not the first time Draghi has made such comments on cryptocurrencies and their regulation. The ECB chief said in September 2017, that the ECB itself has “no power” to regulate bitcoin, and, in November, he said that cryptocurrencies have a limited impact on the world economy.

At the same time as it published the video, the ECB released an explainer on bitcoin that goes into deeper detail on how the institution sees bitcoin.

In addition to echoing Draghi’s comments on price volatility and the lack of institutional or government backing, the explainer notes that bitcoin is not accepted widely and “transactions are slow and expensive.”

Furthermore, it adds that there are no legal protections for users who lose their bitcoins to theft if their wallet were to be hacked.

Mario Draghi image via ECB/YouTube

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ECB President: EU Banks Show 'Limited Appetite' for Cryptocurrencies

The European Central Bank (ECB) said that financial institutions in the European Union do not appear to be as enthusiastic about cryptocurrencies as the public.

In a European Parliament meeting on Feb. 5, the ECB’s president, Mario Draghi, commented that the central bank is not seeing a “notable holding of cryptocurrencies” among banks in the region.

“Actually, the credit institutions established in the European Union are showing a limited appetite for digital currencies like bitcoin, notwithstanding the high level of public interest,” he added.

Yet, he indicated the belief that recent development in the market, such as the launch of bitcoin futures contracts in the U.S., may spark growing interest among the EU’s financial institutions.

He also offered a warning that banks should be wary of the risk of holding cryptocurrencies due to high volatility and risk, as well as the absence of a specific supervisory framework.

While Draghi has stated before that the ECB has no authority to regulate cryptocurrencies, he concluded that exploration of their potential impact on the establishment is currently in progress through the Single Supervisory Mechanism. This allows the ECB to perform a supervisory role in monitoring financial stability among participating nations.

Draghi’s comments also follow remarks made in October 2017 in which he said that cryptocurrencies are still too low-impact to be worth regulating within the EU.

Currently Europe is home to some of the world’s biggest cryptocurrency exchanges such as Bitstamp and HitBTC, which together saw over $1 billion in trading volume in the last 24 hours, according to data from CoinMarketCap.

Mario Draghi image via Shutterstock

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The ECB Wants to Hear Your Cryptocurrency Questions

The European Central Bank (ECB) is soliciting questions from the general public on cryptocurrencies, among other topics, for their third Youth Dialogue.

In an announcement Thursday, the ECB invited Twitter and Facebook users to ask the bank’s president, Mario Draghi, questions about a possible global economic crisis, Europe’s economy, as well as cryptocurrencies and blockchain.

Notably, the ECB repeatedly listed some example questions about cryptocurrencies on its announcement page.

Similarly, in a tweet, the ECB highlighted bitcoin as a potential topic, specifically honing in on whether it could displace traditional, government-issued currencies.

People interested in asking questions have until Jan. 23 to ask them using Twitter or Facebook. Draghi is set to respond to the questions in a series of videos next month on Feb. 12.

While the ECB is notably highlighting this topic area, Draghi himself has weighed in on the issue several times in the past, stating in November that they have a limited impact on the European economy.

Further, Draghi has said that he doesn’t believe cryptocurrencies are mature enough to regulate.

Mario Draghi image via Shutterstock

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ECB President Draghi: Cryptocurrency Impact Still 'Limited'

The head of Europe’s central bank thinks cryptocurrencies are too low-impact to regulate.

Speaking to the European Parliament on Monday, Mario Draghi said digital currencies are not a threat to the ECB’s control over the euro due to a lack of adoption within the 27-member economic bloc. As a result, cryptocurrencies’ impact on the economy would be limited, according to Reuters.

He was quoted as telling lawmakers:

“We think that all this is pretty limited. So it’s not yet something that could constitute a risk for central banks.”

Draghi’s remarks come just days after an ECB governing council member said central banks are trying to decide whether to regulate digital currencies. National Bank of Austria president Ewald Nowotny said lawmakers are asking themselves whether they should get involved in regulating cryptocurrencies, citing China’s recent shutdown of bitcoin exchanges.

Indeed, this week’s statements are the latest in which Draghi, who previously serves as head of Italy’s central bank, has opined on the subject of cryptocurrencies – while also demurring on the question of whether the institution will ultimately pursue some form of regulation.

Draghi said the ECB would not regulate the space last month, telling the press 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 still being wary of any potential risks.

Draghi also does not think the ECB can regulate bitcoin, telling the parliament’s Committee on Economic and Monetary Affairs in September that regulating cryptocurrencies falls outside the scope of the bank’s powers.

Draghi image via Matthi / Shutterstock

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ECB President: Bitcoin Not 'Mature' Enough to Be Regulated

Mario Draghi, president of the European Central Bank (ECB), has said that cryptocurrencies are not “mature” enough to be regulated.

Speaking at a press conference last week, CNBC reports, Draghi told reporters:

“With anything that’s new, people have great expectations and also great uncertainty. Right now, we think that – especially as far as bitcoins and cryptocurrencies are concerned – we don’t think the technology is mature for our consideration.”

Making the comments in response to a question on the potential of cryptocurrencies, Draghi further said that one of the lessons of the financial crisis is to “cherish” the benefits of fintech innovations like bitcoin, while still paying attention to their “potential risks.”

The comments follow his statement last month to the European Parliament’s Committee on Economic and Monetary Affairs, in which he said that ECB does not have powers to regulate or prohibit cryptocurrencies.

While it seems Draghi plans to wait as the technology matures, Christine Lagarde, managing director of the International Monetary Fund (IMF), recently said that cryptocurrencies must be taken seriously as they have the potential to cause “massive disruptions.”

Mario Draghi image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Mario Draghi: European Central Bank Has 'No Power' to Regulate Bitcoin

Mario Draghi, president of the European Central Bank (ECB), has indicated that his institution does not have the powers to regulate cryptocurrencies.

Making his statements to the European Parliament’s Committee on Economic and Monetary Affairs, Draghi said:

“It would actually not be in our powers to prohibit and regulate” bitcoin and other digital currencies.

The comments came in response to a question from the committee over whether ECB intends to issue a regulatory framework or an all-out ban on cryptocurrencies, and whether Draghi felt that higher capital requirements for fintech were required to protect the banking sector.

Draghi revealed that the ECB has yet to discuss the potential impact of cryptocurrencies, but likely areas of analysis include the risk posed by cryptocurrency due to its scale, usage and economic impact.

“We have to ask what effects cryptocurrencies have on the economy,” Draghi stated. Adding, that they are still too immature to be considered a viable method of payment.

The primary concern for the ECB surrounding cryptocurrencies, and digital innovation more generally, is cybersecurity, he went on, stressing that protecting against cyber risks is central to the ECB’s agenda.

Earlier this month, Draghi also criticised the proposed initiative by Estonia’s e-Residency project to launch a national cryptocurrency called “estcoin,” reportedly stating: “I will comment on the Estonian decision: no member state can introduce its own currency. The currency of the Eurozone is the euro.”

Draghi is not the only senior ECB official to comment on cryptocurrencies in recent days.

The central bank’s vice president, Vitor Constancio, made headlines last week when he stated that cryptocurrencies were a purely speculative asset, and compared them to “tulip mania” – the 17th century trading bubble experienced in the Netherlands. Constancio stated that the ECB doesn’t see the technology as a “threat to central bank policy.”

Mario Draghi image via Shutterstock

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