Mario Draghi, President of the European Central Bank (ECB) in an address to the European Parliament this week stated that European Banks could soon start holding positions in Bitcoin. This follows the trading of Bitcoin futures contracts on US exchanges.
The ECB President weighed in on the subject of cryptocurrencies after other participants and speakers attending the meeting had touched on it. He states that the ECB is yet to witness any trend that shows that European Banks are holding cryptocurrencies. He says that despite huge public interest in cryptocurrencies, European banks are yet to begin making active moves into the space. He however admits that as cryptocurrencies continue to permeate the everyday lives of people, the trend could change and we could see European banks beginning to take positions in contemporary digital currencies. He states thus;
“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”
He notes that the cryptocurrency market is still pretty much risky with a lot of volatility and adds that banks will have to take cognizance of this and take steps to mitigate the risks. The ECB President also touched on the coming into place of a uniform oversight via a ‘Single Supervisory Mechanism’ to preside over digital assets’ risk as pertains to banks and related institutions. Draghi in November last year stated that cryptocurrencies do not pose any major threats to the financial system and central banks.
The ECB President has also in times past said that the ECB does not have the authority to regulate Bitcoin and cryptocurrencies for that matter and this statement even though might show some interest from the Central Bank in cryptocurrencies, it is not a deviation from the ECB boss’ previous comments – this week’s statement shows a central bank considering a supervisory position instead of a regulatory one.