Europe's central bank now wants to regulate crypto after identifying that the blockchain market shows all signs of financial stability risk.
(Photo : Photo by Dan Kitwood/Getty Images)
A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile.
ECB (European Central Bank) explained that since the rising crypto market is global, its issues can also have international effects.
"Based on the developments observed to date, crypto-asset markets currently show all the signs of an emerging financial stability risk," said ECB via Bloomberg's latest report.
Europe's Central Bank Wants To Regulate Crypto
The European Central Bank published a new report stating that investors in the cryptocurrency market are still increasing even with all the risks being identified by blockchain and financial experts.
(Photo : Photo by Dan Kitwood/Getty Images))
A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile.
Also Read: China Sees Renewed Bitcoin Production as Miners Skirt Beijing Cryptocurrency Regulations
ECB explained that digital coins offer faster financial gains than traditional asset classes. But, these cryptocurrencies pose more financial stability risks than conventional financial assets.
Because of this, Europe's central bank is now warning crypto investors regarding the financial stability risk signs. On the other hand, ECB also asks for tighter regulation efforts, especially after the stable coin TerraUSD decreased in value this May.
ECB President Christine Lagarde, the Governing Council member Francois Villeroy de Galhau, said that cryptocurrencies are still "worth nothing."
Crypto Investment Risk
Ever since the crypto industry became popular financial experts have always warned investors to be careful since these digital coins are still unstable.
They can either gain a lot of revenue from their investments or lose all the money they put on certain cryptocurrencies. Now, Lagarde said that various individuals now experience the issues with the blockchain market.
As of writing, the European Central Bank is still asking for the EU to approve its so-called MiCA, a regulation action for the blockchain market.
But, it might take some take since the European Union still needs to check the new regulatory action proposal before it can be implemented.
If you want to see further details about MiCA, you can visit this link.
On the other hand, the U.S. Treasury Department now wants crypto companies to suspend blockchain wallets that are used for illegal transactions automatically.
Meanwhile, Jack Dorsey's Block Bitcoin now plans to expand its ecosystem.
For more news updates about cryptocurrencies and their risks in the financial market, always keep your tabs open here at TechTimes.
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Written by: Griffin Davis
