The European Central Bank (ECB) has indicated that has no plans of introducing an EU-backed digital currency. The news is not a surprise considering that the back has historically had an unsupportive attitude towards cryptocurrencies.
The world is not ready for virtual currency
In a statement, European Central Bank President Mario Draghi said that there is no real need for cryptocurrencies around the world. He added that in its infant stages, blockchain technology still has a lot of development work to be done before the bank can make an attempt to adopt it.
The ECB adds to a list of many financial stakeholders who are still hesitant towards the adoption of blockchain technology. According to many, blockchain technology presents a direct challenge to the traditional financial system. However, the comment by Draghi may have minimal impact in the market as many are already aware of the advantages that come with using blockchain technology.
Nations and Cryptocurrency
Apart from the European Union, the International Monetary Fund, one of the most respected and influential institution around the world has also openly expressed a negative attitude towards cryptocurrencies. In fact, the IMF is on record for exerting pressure on the Marshall Islands to drop its state-backed cryptocurrency. The move was criticized by many who termed it Draconian. This is because the proposed state-backed coin is meant to only raise $30 million in its ICO.
However, not all are against IMF?s stance. Many players in the financial sector have openly discouraged countries from launching state-backed digital currencies. Apart from the fact the currency has many loopholes that could encourage money laundering; others view cryptocurrencies as s direct competitor to fiat currency. This is because digital currencies are able to rise in value based on the number of places where it can be used. This has caused even more confusion among investors as well the markets.
In an official statement, the European Central Bank stressed that it does not treat cryptocurrencies with high stakes has many do in the market. The bank noted that many financial institutions around the world are handling cryptocurrencies with a lot of precautions.