VOT Research Desk
On November 30, the European Central Bank (ECB) outlined its position on Bitcoin (BTC) and the cryptocurrency ecosystem.
The banking institution made the case that digital assets shouldn’t be legitimised in this blog post by outlining the huge contrasts between how they are regulated in Europe and the US.
After FTX, one of the biggest exchanges in the world, collapsed and declared bankruptcy, this development occurred.
Numerous creditors have millions of dollars locked on the platform as they wait for a judgement as a result of the exchange’s failure.
Ulrich Bindseil, director general of the ECB, and Jürgen Schaff, an advisor, described the drawbacks of cryptocurrencies and how authorities are not in agreement.
Pessimistic the three main points made by Bindseil and his coworker are as follows: high energy consumption, waste production, and the suitability of BTC as a payment mechanism or a kind of investment.
According to the blog, it “should be viewed as neither in regulatory terms and so should not be legitimized” because it is neither an efficient payment method nor an investment.
Despite potential short-term advantages, the banking sector should be cautious of the long-term harm from pushing Bitcoin investments (even without their skin in the game).
The pair also emphasizes the obvious difference. between the ways that Europe and the US handle the regulation of the crypto area. This blog wrote,
Although the EU has decided on a thorough regulatory package… US Congress and the federal government have failed to reach an agreement on clear regulations.
The current regulation of digital assets, according to Bindseil and Schaff, is “partly molded by misconceptions” and the idea that rules shouldn’t stifle innovation.
