Finance Minister of Germany Doesn’t Fear Bitcoin and the Like; Can’t Outmatch Fiat Currency Models
German’s Finance Minister Says Crypto Coins are yet to match the Current Fiat Currency Models
Cryptocurrency regulation is a concern for most Government authorities at the moment. Olaf Scholz, current Finance Minister in Germany is skeptical on whether digital assets are yet to achieve the efficiency level of fiat money. This is according to a report on the 18th of September by Cointelegraph.
In his own words, Mr. Olaf said he indeed doubts that crypto coins architecture can serve the functions run by the existing currency models. The context of this discussion was the Münster, German-Dutch Corps where a citizen dialogue was being held. He further made a comparison of the digital currencies with the 17th Century tulip fever that resulted to the Netherlands market bubble. Scholz warned of a looming danger in the crypto assets that might cause a repeat of history.
In his defensive against the cryptocurrency technology, Mr. Olaf argued that the resources involved in mining and running the networks could surpass the utility derived in economic terms. However, he was categorical that this is the current situation meaning the near future could change the course of crypto for more adoption.
In addition to the volatility, cryptocurrencies are avenues for illegal payments that facilitate activities like money laundering & terrorism according to Scholz. In his opinion and the team he speaks for, crypto coins are yet to prove fundamental value that can make economic sense.
The issue of regulating digital assets has previously been discussed by the larger European community. Legislators from the region convened a few weeks ago to air their sentiments about the grey zone in regulation of cryptocurrencies and its associated challenges so far.
At the beginning of September, Initial Coin Offerings as capital acquiring means was discussed in the European Parliament. Most of the members were of the opinion that though it’s a good avenue, regulation on how the ICO process is done and obligations involved need to be set clear.
Valdis Dombrovskis, the current VP of the European commission supported the necessity for more regulations during the Economic and Financial Affairs Council meeting in Vienna. His opinion on crypto coins is however a positive one as he noted that the digital assets will find a niche in the market to sediment their fundamental value. His emphasis was that the European Union will look into digital assets and find a way to classify and regulate the coins.
Before the above meeting, a Belgian-based hub had come up with a suggestion report for the EU to uniformly regulate digital currencies for its member states. It was noteworthy from this report that arbitragers in the coin markets are currently reaping a lot given the regulation uncertainties.