EU Parliament says Digital Currencies will not Challenge Central Banks
July 2, 2018 11:59 am
The European Parliament said last week; Digital Currency will not challenge the economic power of central banks.
As per the latest Monetary Dialogue report issued on June 26, the European Parliament’s Committee on Economic and Monetary Affairs stated that while digital currencies have made financial transactions “comparatively safe, transparent, and fast,” they pose no threat to sovereign currencies around the world.
The analysis, which was led by the Center for Social and Economic Research, a non-profit research institute based in Warsaw, Poland. First accepted the positive changes digital currencies have brought to the financial transaction, noting that they are now “are used globally, neglecting national borders.”
The analysis claimed, Digital Currencies “respond to real market demand,” and they will have the potential to become a “fully-fledged private money” or even a permanent element to the global economy.
Although, the research stated it is “unlikely” digital currencies will threaten central banks and sovereign currencies and dismantle the current monetary structures, particularly in countries where their sovereign currencies are widely circulated.
At present, As per the analysis, the total value of all digital currencies circulating in the market heavily underweight the value of major sovereign currencies in circulation.
The report referred to runaway inflation in Venezuela and saw that in much smaller monetary jurisdictions, digital currencies might offer the other option to unstable currency.
Also, the analysis recommended that financial regulator should treat digital currencies “any other financial transactions or instruments,” given the possible risks linked with transactions using digital currencies, including money laundering, tax evasion, and financing illicit activities.