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 that “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 cyberrisks 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