European Central Bank (ECB) has detailed its stance on Bitcoin and cryptocurrencies. A published paper addressed the significant differences in the regulation of digital assets in Europe and the US.
After the collapse of the FTX stock market, the European Central Bank began to act more quickly for regulations. As a result of the stock market crash, many creditors have millions left on the platform. The final result is not yet known.
This event in the crypto money ecosystem will remain as a big ‘black mark’. Of course, crypto critics were quick to comment that ‘we were right’.
Names like Changpeng Zhao are creating a billion-dollar recovery fund to help the ecosystem.
European Central Bank Warns Against Crypto and Bitcoin
ECB Managing Director Ulrich Bindseil and advisor Jürgen Schaff, cryptocurrency summarized the negative impacts of its units and how regulators were not on the same page. The article in question has a rather ‘pessimistic’ and ‘critical’ language in general.
The main arguments put forward by Bindseil and Schaff are as follows. Problems with high energy consumption, waste generated and how suitable Bitcoin is as a payment system or a form of investment.
The article further adds that, as it is neither an effective payment system nor an investment, it “should not be treated as either from a regulatory standpoint and therefore not justified.”
“The financial industry should be wary of the long-term harms of incentivizing Bitcoin investments despite the short-term profits they can achieve.”
It also revealed the stark difference between Europe and the US’s approach to the crypto space in terms of regulation. The following statements were included in the blog:
“While the European Union has agreed on a comprehensive regulatory package, Congress and federal authorities in the US have yet to agree on coherent rules.”
Bindseil and Schaff also shared the comment that the current regulation on digital assets is “partial misunderstanding” and that the law should not hinder “innovation”.
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