the ECB is concerned that Bitcoin could potentially affect financial stability
Yves Mersch, member of the Executive Committee of the European Central Bank (ECB), spoke about the dangers of Bitcoin and other cryptocurrencies, during a recent interview with the German newspaper Boersen Zeitung. Mr. Mersch stated that the speculative nature of trading digital currencies poses a threat to global financial stability.
According to Mersch, one of the main problems in the current environment, the cryptocurrency market is the fact that many individual investors take out loans and other forms of credit with the aim of creating liquid assets that can be invested in bitcoin and other volatile virtual currency. The risk increases when people take on such important responsibilities like a mortgage to make such a fragile investment, as investing in the cryptocurrency.
In addition, the ECB is concerned about the fact that banks and other financial institutions began to enter the cryptocurrency market and invest in it. As explained by Mr. Mersch:
“When the financial market infrastructure such as stock exchanges, part of the business, there is a risk to financial stability”.
The increasing integration of standardized exchanges and banks in a newly adapted cryptocurrency market is forcing the ECB to reconsider the level of risk to individual investors and to a greater extent the entire global economic ecosystem.
“You can imagine that now will grow a generation having no idea how to earn interest on their money?”
Clearly, the ECB believes that banks should intervene and take steps to control the increasingly risky business of investing in bitcoin and other cryptocurrencies.