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Vice President of the ECB backs the regulation Cryptocurrencies

According to Luis De Guindos, the European Central Bank’s current Vice President, the regulations on crypto-assets should be like any other asset on the market. During a series of summer courses funded by the European Parliament and the European Union, De Guindos presented his thoughts.

De Guindos’ Cynicism

He said this about cryptocurrencies in particular:

“I would not prohibit them, but issuers must be required to follow the same conditions as those of other financial assets. Therefore, avoid everything that has to do with money laundering or terrorist financing.”

According to De Guindos, shady people may easily exploit cryptocurrencies for illegal reasons because of their pseudonymous characteristics. De Guindos has long been suspicious about cryptocurrencies. He refers to it as “crypto-assets,” because they, in his opinion, do not function as legitimate payment mechanisms. Simultaneously, he claimed that these crypto-assets do not influence the region’s financial stability.

In comparison to other more traditional assets, these new instruments do not have an economic basis, according to De Guindos. Cryptocurrencies’ worth, he believes, stems solely from their rarity rather than their link to other assets.

De Guindos’ Opinion on Crypto

This isn’t the first time De Guindos has expressed an opinion on cryptocurrency. He remarked on May 19 that cryptocurrencies aren’t actual investments because of their value proposition’s instability. The ECB, on the other hand, is looking into the possibility of creating a digital euro. This would provide the ECB with a tool to combat the growth of private alternative payment systems like cryptocurrencies and those supplied by fintech firms.

The public continues to anticipate the ECB to decide on issuing a digital euro shortly. De Guindos feels that a currency like this is desperately required. He defined the digital euro as:

“Something we just have to do. It’s not trivial in terms of the potential implications for financial stability and monetary policy, so we will have to calibrate this project to minimise any potential negative consequences it could have.”

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.