Olaf Scholz, Germany’s Finance Minister is having a critical stance and does not think that cryptocurrencies might take traditional currencies’ place, as reported by Reuters on September 18.
At the ‘Bürgerdialoge in Deutschland‘ in Münster, Scholz stated: “I would doubt today, whether it has a perspective as a currency model,”
He associated digital currencies to the tulip fever bubble in the 17th century in the Netherlands, explaining: “and the danger is great that there will be such a tulip inflation.”
Scholz stated that the required computer processes for the execution of digital currencies are so high-priced and energy-intensive that it might not work. However, he did not want to make any statements for the next 20 to 30 years.
As stated by Scholz, digital currencies should be followed closely by the government, regarding the misuse cases such as money laundering, terrorist financing as well as other illegal actions. He continued: “…we do not believe that they already have an economically significant importance today.”
In the past several weeks, European legislators have met to discuss their opinions and concerns about cryptocurrencies, potential improvements, and problem-related matters with digital assets.
Earlier this month, members of the European Parliament have sat together to discuss regulations for ICOs, which while being a ‘very interesting and promising vehicle instruments’ for the growing capital, need further regulatory surveillance – according to many European legislators’ opinions.
In a meeting of the Economic and Financial Affairs Council, held in Vienna, Valdis Dombrovskis, European Commission Vice-President suggested that digital currencies need to have more regulations. Although the nature of crypto is not meant to be regulated, Dombrovsksis emphasized that the European Union will put more effort into the improvement of crypto assets categorization and also regulation.
At the same meeting, a paper by Bruegel, a Belgian think tank, recommended European regulators to embrace the form regulations on digital currencies at the level of European Union. The report also remarks that because regulations are given to national institutions, there is a change for crypto businesses to do “regulatory arbitrage”.
Author: Berna Bayindir
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