Bitcoin

Recent developments such as the Bitcoin futures contracts listings by U.S. exchanges could see lead European banks holding positions in bitcoin.

That’s according to the president of the European Central Bank (ECB).

Speaking earlier this week at a European Parliament meeting, Mario Draghi, chief of the ECB, highlighted the fact that digital currencies such as bitcoin had already been touched upon by other speakers.

Despite interest with the sector on the rise, Draghi noted that the central bank had not observed a holding of digital currencies by banks, adding:

Actually, the credit institutions established in the European Union are showing a limited appetite for digital currencies like bitcoin, notwithstanding the high level of public interest.

Notably, though, the president of the ECB said that this could change given new developments in the market.

However, 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.

Possibly so as not to appear too pro-bitcoin, Draghi added that as digital currencies are in an unregulated space they should be looked at as ‘very risky assets.’ This is due to their volatility and speculative nature. The chief also referred to the work that is being done in the Single Supervisory Mechanism that aims to identify potential risks that digital assets could pose to banks.

In September, during statements made to the European Parliament’s Committee on Economic and Monetary Affairs, the president of the ECB said that it does not have the power to ‘prohibit and regulate‘ digital currencies such as bitcoin.

He also expressed in November that the impact of the cryptocurrency market was ‘limited‘ and that it doesn’t pose a threat to the ECB.

Draghi’s remarks come at a time when Daniele Nouy, the ECB’s chief supervisor, said yesterday that regulating the cryptocurrency market wasn’t a top priority for them. Good news for the sector as it slowly regains previous highs.

Speaking to CNBC, Nouy explained:

We scrutinize the issue in a regulatory perspective, we are ready to do something if it was needed, but so far it’s not exactly very high on our to-do list.

However, she said that they were keeping an eye on developments as new risks emerged, adding that there had been no developing interest among European lenders at present.

Featured image from Flickr via Rudin Group.