Mario Draghi, the president of European Central Bank, has expressed his views about cryptocurrency recently at ECB youth dialog meeting on 9th May.
In the meeting, one of the students asked Mario about his stance on cryptocurrency, in response to that he referred cryptocurrencies as risky assets but not currencies. He further said the importance of Euro would remain the same after one day and even after a month but the cryptocurrencies are highly unstable and its value does not remain the same even after one day.
He further said the digital currencies are not yet significant enough to affect the economy in a macro way. He also said regulating the digital currency does not fall under the competency of ECB. It is the responsibility of the people who purchase those assets should be aware of the risk they are running into.
Although millions of people possess cryptocurrency and trade them as well, the overall impact on the real world because of them is limited. But the case is dissimilar for Venezuela because the economic instability and inflation people were left with no choice but to secure their money in cryptocurrency. For them, Bitcoin and altcoins have acted as a pressure relief valve that never existed in olden days.
The banker believes consumer protection agencies should step in to protect the people in the cryptocurrency space. He also feels ECB has nothing to do in regulating the cryptocurrencies. Draghi feels the currency size of the crypto is not so large enough to get Central bank to get involved for its regulations. He feels the way the cryptocurrencies are getting operated; it does not need to be regulated or monitored.
Draghi is serving his final phase of service as president of ECB. The new president may have different views for cryptocurrencies. Although some people believe fewer regulations are better than substantial for the market.
After his comment, Draghi was highly criticized on Tweeter by the crypto community saying even Fiat currencies also gets affected by inflation. The value of the Euro keeps changing.
Recently several central banks of various nations are toying with the idea of creating a crypto version of fiat currency. But the EU has not yet expressed their thought about it.
At some point of time, it was felt that cryptocurrency could provide a solution to the viable problem of Europe. Even Greece thought of making bitcoin legal in their country to meet the debt crisis. But it is still not clear whether the solution will hold good in the future.