European Banks Could Soon Hold Bitcoin, Says ECB President
The president of the European Central Bank (ECB), Mario Draghi, made a statement on February 5th which said that European banks could hold Bitcoin in the future. In spite of the negative comments about cryptocurrencies he made in the past, the president of ECB confirmed that the banks of Europe may have the intention of holding positions in bitcoin.
International Banks Interested in Bitcoin
The ECB president has commented on several occasions about bitcoin and other digital currencies. This time however, he confirmed that banks are interested in the famous virtual currency. After developments such as the Bitcoin futures contract listings of Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE), there is a possibility that banks could start holding positions in the digital coin.
“[…] recent developments, such as the listing of Bitcoin futures contracts by US exchanges, could lead European banks too to hold positions in Bitcoin, and therefore we will certainly look at that,” stated Mr Draghi at the European Parliament.
But Draghi followed up the remark by stating that there is not an increased appetite for virtual currencies in European financial institutions. He went on to explain that other Bitcoin and other cryptos are unregulated and that they are very risky investment. The crypto market is extremely volatile, with prices fluctuating wildly in a short amount of time. Also, cryptos are not subjected to any specific supervisory actions.
“One or two speakers touched on Bitcoin and other cryptocurrencies. Let me first say that we are not observing a systemically relevant holding of digital currencies by supervised institutions – by banks, in other words. Actually, the credit institutions established in the European Union are showing a limited appetite for digital currencies like Bitcoin.”
Draghi also hinted that an upcoming uniform oversight will come, which will supervise the risk digital assets pose toward supervised institutions, or banks.
The EU central banking head has made some remarks in October 2016, which are quite in contrast with his newest statement, saying that cryptocurrencies haven’t matured enough for the ECB to consider regulation.
Also, in November he added that the impact of the cryptocurrency sector was ”pretty limited” and did not constitute a threat for central banks as decentralized virtual currencies do not have their money supply controlled by financial institutions.
If banks start to hold and invest in bitcoin, that means that its price will grow and the crypto market will receive a substantial influx of capital.