European Central Bank Publishes Risk Report on Bitcoin, Compares the Crypto to the Tulip Mania

2021-5-25 07:36

Earlier last week, the European Central Bank published a new report on the financial stability of the European Union. The report, titled the Financial Stability Review (FSR), detailed potential risks of Bitcoin and other crypto-related assets.

In the context of the broader economy, the ECB stated that “signs of exuberance” in crypto assets were potentially concerning, but that financial stability risks were limited. 

“Signs of exuberance have also been observed in the renewed interest in crypto-assets, although financial stability appears limited.”

While the European Central Bank suggests that cryptos pose little to no risk, other governments have seen their rising use and transactional value as a threat to their sovereignty. 

When Bitcoin and other cryptos surged to all-time highs earlier this year, the Indian government threatened a total ban. As the Lira crashed and the Turkish people flocked to crypto-assets for safe haven, the nation took steps to ban its use. South Korea, on the other hand, imposed such strict regulations that Okex and Binance shut down their operations in the country. The list goes on.

Related Reading | Breaking Down What South Korea’s Crypto Crackdown Means for the Industry 

The ECB Addresses Bitcoin’s Potential Bubble, Corruption, and Environmental Risks

The central bank addressed that one of the main issues of Bitcoin and cryptocurrencies was their volatile, speculative nature — comparing the rising asset class to the tulip mania.

Related Reading: Deutsche Bank Turns Against Bitcoin Amid 50% Drop: Valuation is “Wishful Thinking”

“The surge in Bitcoin prices has eclipsed previous financial bubbles like the tulip mania and the South Sea Bubble in the 1600s and 1700s,” the report read.

In light of Bitcoin dropping more than 50% in the past week, the ECB’s risk assessment on the crypto and its volatility seems more relevant than ever. Source: Tradingview.com

“[Bitcoin’s] exorbitant carbon footprint and potential use for illicit purposes are grounds for concern. Crypto-assets are still not used widely for payments, and euro area institutions have little exposure to crypto-linked financial instruments, so financial stability risks appear limited at present.”

While the European government has yet to have taken any direct actions to stifle the growing industry, a new regulatory framework for cryptocurrencies has been in development since last year.

Like other economic powers such as the U.S. and China, the EU has entertained the idea of launching a central bank digital currency in the near future.

Featured image from UnSplash

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Formosa Financial (FMF) на Currencies.ru

$ 0.0004577 (+0.00%)
Объем 24H $0
Изменеия 24h: -0.11 %, 7d: 98.23 %
Cегодня L: $0.0004538 - H: $0.0004624
Капитализация $394.44k Rank 99999
Доступно / Всего 861.833m FMF

report european bitcoin central bank stability financial

report european → Результатов: 126


Фото:

Why More Institutional Investors Are Making Ether A Key Part Of Their Portfolios

Ethereum, the second-largest cryptocurrency by market cap, is on fire these days, consistently recording new all-time highs. The positive news from the European Investment Bank about issuing $121 Million worth of digital bonds on the Ethereum public blockchain was the missing spark to provoke a roaring demand fire. According to a recent report from Two […]

2021-5-3 19:26


Boson Protocol and Outlier Ventures outline framework for decentralized ecommerce ecosystem

CryptoNinjas » Boson Protocol and Outlier Ventures outline framework for decentralized ecommerce ecosystem Following extensive joint research, Boson Protocol, the project building a capture resistant dCommerce ecosystem using NFTs encoded with game theory, and European venture capital firm Outlier Ventures, have released a formative report outlining the framework for the establishment of a decentralised commercial ecosystem, also known as a dCommerce ecosystem.

2021-4-28 19:10


Фото:

European Investment Bank (EIB) Taps Blockchain Technology for Bond Sales 

The European Investment Bank (EIB) is looking to adopt distributed ledger technology (DLT) for the sales of its digital bonds. The financial institution is collaborating with several top banks, including Goldman Sachs, Banco Santander SA and Societe Generale AG to make the project a huge success, according to a Bloomberg report on April 13, 2021.Read More

2021-4-14 23:00


Фото:

European Union (EU) Proposes the Creation of a Single Market for Trading Cryptocurrencies

At the tail end of 2020, the European Union (EU) Commission should complete its work on digital finance and the results will be clearly defined crypto laws helping the sector flourish.   Crypto is Here to Stay This is according to a report published by IFCReview on Aug 20, citing previous comments by Valdis Dombrovskis, the EU ExecutiveRead MoreRead More.

2020-8-21 01:07


Binance, Huobi Launder Over 50% Of $2.8B In Illicit BTC Transactions: Chainalysis Report

Binance and Huobi cryptocurrency exchanges receives over 50% of the total cryptos used in criminal activities according to a report by Chainalysis, a cryptocurrency data analysis firm. The high figure comes at a time the former is on the edge of moving offices from the European Union as AMLD5 takes effect in the near future. […]

2020-1-16 17:41


European Central Bank: Stablecoins May Be Vulnerable To Regulatory Uncertainty

The European Central Bank (ECB) has recently emitted a new report on the cryptocurrency market. This time, the banking institution approached the issues with stablecoins. The latest report touches on questions such as whether stablecoins can be a solution for the volatility of the crypto market and whether or not they have dangers related to […]

2019-8-30 22:54


Фото:

Facebook Faces Fresh EU Scrutiny As WhatsApp Edges Closer To Mobile Payments

The European Union is actively probing Facebook’s Libra digital currency project for competition law violations, mainstream media report. Facebook’s Libra Has ‘Potential Anti-Competitive Behavior’ According to Bloomberg, which cited official correspondence August 20, the European Commission is quizzing Libra participants via a dedicated questionnaire.

2019-8-21 14:00


Europe’s EESC Concerned Of Blockchain Being Monopolized, Doesn’t Want To See A Digital Divide

The European Economic and Social Committee (EESC) recently expressed disturbing concerns regarding the future of blockchain technology. In their new report, the EESC advised that public measures should be taken in order to ensure that blockchain's potential as a groundbreaking infrastructure for the social economy remains available and accessible to everyone. EESC: Blockchain Technology Must […]

2019-8-2 17:12