It seems to be a good week for cryptocurrencies, maybe not in terms of overall market value, but certainly when it comes to establishing credibility.
Earlier this week, coverage of the Senate Committee statement of Commodity Futures Trading Commission (CFTC) Chairman had been released to the public, bringing to light his positive outlook on Bitcoin and cryptocurrencies, and his approach to improve their day to day handling by regulating them for the benefit of the community.
Around the same time, another high official from a very prominent organization hinted at a positive future development for cryptocurrencies.
The official in question is Mario Draghi and the organization, the European Central Bank (ECB), which handles monetary policy for the European Union and for which Draghi serves as a President.
Draghi’s stance on cryptocurrencies
Draghi is not a novice, in regards to the banking industry or towards his penchant to share his views on cryptocurrencies.
He had previously mentioned that cryptocurrencies have a limited approach and would not affect the operations of central banks, and had also stated that the ECB will not regulate Bitcoin as the bank does not have the authority to do so.
However, his most recent comments head towards a different direction, which for one, does not focus on ebbing away cryptocurrencies from central banking systems but actually hints towards their inclusion within them.
Addressing the European Parliament in France, Draghi mentioned that even though ECB has not been looking into the possibility of banks holding cryptocurrencies at this point of time, it is a very likely possibility that ECB and other banks might consider doing so in the future.
He mentioned that banks are not a fan of cryptocurrencies despite their demand by the general population, alluding towards the uncertainty of regulations and volatility that comes with them.
However, he stated that after considering recent events where major institutions have adopted Bitcoin in terms of investment products, it cannot be ruled out that banks might look into holding Bitcoin in the very least, even if they do not go with other cryptocurrencies at the time.
“… 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.” He said.
Elaborating further on this stance, Draghi was quick to mention that Bitcoin and other cryptocurrencies are not regulated and therefore pose significant risks to any institution that deals with them. Due to this reason, he advised any bank that is interested in holding Bitcoin to make an informed decision after going through everything accordingly.
He also mentioned that while cryptocurrencies do not hold any regulations at this point of time, relevant teams are working over the Single Supervisory Mechanism in order to identify and address potential risks that cryptocurrencies could have for any institutions that are willing to supervise them.
Why are these comments considered as positive?
It is because Draghi has made a few comments in the past – mentioned above – that simply discredited Bitcoin and other cryptocurrencies for being too insignificant to be held by any bank; whereas, these comments actually see them as a potential product and asset that the banks could offer to their customers.
The regulations that might follow could only be commented on once they are presented, but for now, the possibility that one of Europe’s most prominent financial figures is considering Bitcoin and other cryptocurrencies, as significant enough to be held by banks, is promising at the very least.