EU Cautions Possible Overturning of Bitcoin and Cryptocurrencies by Banks

A recent fintech-related report requested by the European Parliament Committee on Economic and Monetary Affairs (Econ) revealed that bitcoin might be brought down given that central banks start to issue their own cryptocurrencies.

Although more competition will spark within the crypto-sphere, central banks might try to limit the success of altcoins and even the giant, bitcoin. In particular, the report reads:

“The arrival of permissioned cryptocurrencies promoted by banks, even central banks, will reshape the current competition level in the crypto market […], however, the market power of banks in traditional banking services might be used to limit competition in the cryptocurrency market through pre-emptive acquisitions or predatory pricing schemes.”

In addition, the report publicized that bitcoin might eventually be at risk within the market, as the central bank’s presence can ultimately bring down competition within the mining sector.

A pie chart issued shows that approximately 75 percent of bitcoin is controlled by five mining pools, including the likes of ViaBTC, AntPool, SlushPool, BTC.TOP and BTC.com, along with the remainder found among 12 other pools.

If the bank’s entrance into the crypto market may pose a risk to the market itself, another problem that seems to arise is its ability to stand against the European competition policy. Mainly, the report stated that the majority of blockchain based firms work:

“outside the jurisdiction of European competition authorities, which makes investigation […] more difficult.”

For the time being, Europe seems to be at lead when it comes to the “supply of wallet and exchange services”, available, which comes out to approximately, “42% and 37% in terms of the number of players”. While this is a proven strength for Europe, its feeble side is that of its involvement in mining, which sits at merely 13%.

At the time of writing, bitcoin sits at a value of USD $7,672 and market cap of $131.7 billion. Since last week, the giant has been in the green zone, which for many is just the start of its way up. Whilst it is true that bitcoin has grown by approximately 4 percent in the last week, do you think it will continue to strive? Will Europe’s report become true?

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