The president of the European Central Bank (ECB) has said that digital currencies don’t pose a threat to it despite their increasing market value.
Speaking to the European Parliament on Monday, Mario Draghi, president of the ECB, said:
We think that all this is pretty limited. So it’s not yet something that could constitute a risk for central banks.
These comments come at a time when the digital currency market is experiencing a surge in price. According to CoinMarketCap, the combined market value is worth $243.7 billion. Boosting the market’s price is bitcoin. At the time of publishing the cryptocurrency is trading at $8,230. Earlier today, it was reported that the cryptocurrency had scaled $8,200 for the first time in its history. This year bitcoin has rise more than 700 percent in value.
Draghi has long commented on the cryptocurrency market in the past. In July, in a letter addressed to the members of the European Parliament, Draghi wrote:
Although the market capitalisation of VCS [virtual currency schemes] has increased since the publication of these reports, there is no evidence to suggest that the connection of VCS to the real economy has strengthened significantly.
Interestingly, at the time, Draghi added that while they may not present a risk to the financial economy now, ‘a build-up of risks’ from digital currencies could be seen in the future. More recently, however, the president of the ECB went so far as to say that cryptocurrencies like bitcoin were not ‘mature’ enough for regulation.
At a press conference last month, he stated:
Right now we think that especially as far as bitcoins and cryptocurrencies are concerned, we don’t think the technology is mature for our consideration.
It seems, though, that with a rise in the digital currency market many within the financial world are beginning to feel the impact it could present. So much so, that Vitor Constancio, ECB vice president, said that digital currencies would not replace the fiat system.
Earlier this month, Constancio was reported as stating:
The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes.
He added that it was unlikely that central banks would issue their own digital currencies without limits. It remains to be seen what steps the ECB will take against the cryptocurrency market and whether or not it will eventually call for it to be regulated amid its rising value.