Cryptocurrencies Are No Real Risk To Financial Future, German Central Bank Affirms
Cryptos have often been accused of many things. Some people have connected them to scams while others have claimed that they are unstable, too volatile or that they pose a risk to the financial stability of the world. The Central Bank of Germany, however, disagrees with these notions.
Burkhard Balz, an official representative from the Central Bank of Germany, has recently posted on the bank’s site an article about how cryptocurrencies can be a part of the financial transformation that is happening now.
On the article, Balz, which is a member of the bank’s executive board, affirms that cryptocurrencies present no risk to stability whatsoever. In his opinion, the only actual problems can be caused when there are gaps in the regulation.
He affirmed that whenever the cryptocurrencies may fall outside of the scope of the national or international regulation they may end up posing some problem, but that they are not risky once international standards are set.
Balz has, for instance, pointed out that several Bitcoin ATMs set in Europe right now are not fully compliant with the local Anti-Money Laundering (AML) laws. This means, however, that what should really be changed and upgraded are the laws and not the technology.
The executive has made one important warning about Bitcoin and other cryptos, though. He believes that if they get too popular very quickly some issues could occur. In this case, the industry would need closer scrutiny.
He was far from a skeptic on the technology, in any case. Balz expressed high hopes for how these new technologies can bring transformation to someone’s life. He cited artificial intelligence, cloud services and the blockchain as examples of technologies that could revolutionize the world.
To him, the blockchain technology is not even about the evolution of how banking is done, but a true disruption that can really change how the financial sector operates forever.
Balz did not talk about Facebook’s Libra project, one of the hottest subject of the crypto world now, but another prominent banking executive did. Benoir Couere, an European Central Bank executive board member, has affirmed that the new crypto created by Facebook may bring some problems.
In his opinion, European regulators need to be ready to act quickly in order to deal with this upcoming development.