An occasional paper titled, ‘Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructure’ was released by the European Central Bank for Europe, which administers the monetary policy within the Eurozone.
Occasional paper: Crypto-Assets – Implications for financial stability, monetary policy, and payments and market infrastructures https://t.co/3lFPhcbk1R
— European Central Bank (@ecb) May 17, 2019
The bank specified under the heading of potential implications for monetary policy that cryptocurrencies, including Bitcoin, are yet not able to achieve the purpose of money.
It further mentioned that cryptocurrencies do not have any real impact on the economy, and they do not have any noteworthy effect on monetary policy.
Nonetheless, the bank was of the view that circumstances could be different if cryptocurrency was to be given the status of reliable replacement of cash and deposits.
In the report, it was also mentioned that as Bitcoin is being used by a small number of merchants as a payment method, so this tends to act as an indicator that shows that the major cryptocurrency has absolutely no impact on price setting.
In addition, the bank asserted that factors such as crypto-assets’ rapid fluctuation of prices in a short time span, lack of central bank’s support and low levels of recognition from the merchant community are tend to be causing impediment for crypto-assets to be used as a replacement for cash and deposits and satisfy the conditions of being a monetary asset in time ahead.