Cryptocurrencies are assets, not currencies: Mario Draghi

European Central Bank (ECB) President, Mario Draghi, has claimed that cryptocurrencies are assets and not currencies when recently questioned about his stance on Bitcoin – and that there are no plans for a centralised euro-based digital currency.

The statement was made as Draghi was answering questions from winners of the Generation Euro Students’ Award at the ECB’s Youth Conference. Draghi counterquestioned “Who is behind the cryptocurrencies?” for the audience to conclude that they aren’t that important and impactful on the present economy thanks to fiat currencies and the current size of the crypto market, which isn’t sufficiently large for central banks to get involved with the process of regulation.

He further added: “I would say that it is more something that falls within the field of consumer protection. We want to ensure that buyers of these assets know what they are doing, and are aware of the risks.”

No plans for euro-based digital currencies

The European Central Bank seemingly does not see any benefits of using blockchain technology, having dismissed any plans to do something similar for the European Union with a euro-based digital currency. In May 2018, ECB board member Yves Mersch had said that banks should segregate their dealings in cryptocurrencies from other activities.

Draghi added: “We tend to consider [cryptocurrencies] as speculative assets, highly risky, but as far as the rest is concerned, it’s not really something that pertains to the central bank – the task of monitoring and regulating. It’s more, I would say, something that falls within the consumer protection competence, where you want to make sure that people who buy into these assets know what they’re doing and are aware of the risks they run.”

Digital versions

Several national central banks have recently been discussing the idea of creating a digital version of their fiat currency. The Bank of Japan has provided in-depth research on the benefits and outcomes of central bank digital currency (CBDC) integration within the existing financial system.

According to beincrypto.com: “While the so-called analysts and futurists debate about whether or not the EU will collapse, cryptoassets are gaining influence within Europe. The EU has hosted workshops like “Blockchains for Social Good” to discuss how cryptos can be implemented within Europe.

“Beyond theoretical discussions, the EBP and EBSI have formed to facilitate the social integration of cryptoassets using distributed ledger technologies throughout Europe. At least two practical use cases have emerged to showcase the feasibility of such integration.

“Furthermore, Southern European countries are continuing to push forward for the social integration of cryptoassets.”

At the moment, we have yet to see a comparable product launch in Europe, but the recent news of Fidelity Investment’s entry into the crypto space and the firm’s recruitment for staff to manage custody operations for digital assets at an office in Dublin may point towards a future for the decentralised asset in Europe.

According to Maya Kumar, Head of UK and Ireland, Luno, regulation is bringing changes to the cryptocurrency sector.