EU report: cryptocurrencies will not challenge the power of central banks

02 Jul, 2018
by Will Heasman
EU report: cryptocurrencies will not challenge the power of central banks

The European Parliament has asserted that cryptocurrencies are “unlikely” to challenge the status quo when it comes to the economic power of central banks. 

The analytic research for the report was undertaken by the Center for Social and Economic Research, a non-profit research institute, and what they returned wasn’t entirely negative, recognizing the ability of cryptocurrencies that are “used globally, disregarding national borders” adding that they are “relatively safe, transparent, and fast”.

The report continues to speak on the potential of virtual currencies (or VCs, as the report puts it) becoming “full-fledged private money”:

“one cannot exclude the possibility that a number of users and transactions will increase to the extent that VCs will become a fully-fledged substitute of sovereign currencies in the future. We assume that VCs have potential to serve as full-fledged private money regardless of their future share in the overall volume of transactions and financial assets”.

ultimately, the report judged cryptocurrencies as “unlikely to challenge the dominant position of sovereign currencies and central banks” at the same time as saying that due to their technologically sound characteristics they have a “better chance to survive and develop as compared to their 18th and 19th-century predecessors”

The report also cites Venezuela’s increase in Bitcoin mining, asking the question “will the person feeling the troubled sovereign currency be ready to choose a VC instead” the answer to which seems to be, (in Venezuela’s case at least) yes.

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