Saturday, October 7, 2017

European Central Bank (ECB) looking seriously at restricting use of de-centralized cryptocurrencies

As we have mentioned many time before here at The Daily Economist, there has always been a Damocles Sword over Bitcoin and the myriad of de-centralized cryptocurrencies that have sprung up since the 2008 financial crisis.  And that hanging threat has been the inevitable reactions by sovereign entities to the intrinsic threat that comes from privately printed currencies.

Money and currencies are simply tools, but ones that represent both freedom or tyranny dependent upon who controls their issuance.  And with Western governments having for the most part morphed into 'Top-Down' form of controlled fascism, it was only a matter of time before one or more of these institutions decided to react.

And on Oct. 6, news is emerging that a major entity is getting ready to act against the cryptocurrency sphere, including the potential of of placing major restrictions on their use within the Eurozone.

Image courtesy of Coin Telegraph
The European Central Bank (ECB) is currently discussing the possibility of implementing legal restrictions relating to cryptocurrencies, according to Ewald Nowotny, a member of the ECB’s governing council and the governor of the National Bank of Austria.  
Nowotny, who has previously expressed reservations about the adoption of cryptocurrency, recently reiterated his stance that bitcoin “is not a currency,” citing its volatility and lack of oversight as well as the fact that its current valuation is largely the result of speculation.  
In China, he said, the virtual currency has been used both as an instrument of capital flight and as a means to circumvent legal regulations. These concerns, exacerbated by price fluctuations that would be considered drastic for fiat currencies, have caught the attention of the ECB and prompted discussions around the introduction of laws to restrict the use of cryptocurrencies.  
Nowotny’s statement comes about a week after ECB President Mario Draghi told the European Parliament that the bank lacks the authority to regulate or prohibit bitcoin and other digital currencies. 
Also in September 2017, the ECB issued a report advising that distributed ledger technology (DLT) should be interoperable with non-DLT systems in order to be viable for real-world use cases. This position suggests an openness to at least partially embracing blockchain technology, the cryptographic protocol on which bitcoin and other virtual currencies are built. – ETH News
When IMF Chief Christine Lagarde was talking about the inevitability of cryptocurrencies on the Blockchain, she was not focused on private de-centralized ones, but ones that would one day come from sovereign governments or central banks.  And make no mistake, the establishments are nearly 100% on board the Blockchain bandwagon, but their allowance of privately run currencies outside their control is something that remains murky and unclear in the future.

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