The European Parliament said last week that cryptocurrencies will not challenge the economic strength of the central bank.
In the latest currency dialogue report released on June 26, the European Parliament’s Committee on Economic and Monetary Affairs said that although cryptocurrencies make financial transactions “relatively safe, transparent and fast,” they have global sovereignty. Money does not pose a threat.
The analysis was conducted by the Center for Social and Economic Research, a non-profit research organization based in Warsaw. The study first confirmed the positive changes that cryptocurrencies brought to financial transactions and noted that they are now “used globally and do not involve national borders”.
The analysis says that cryptocurrencies “react to real market demand,” and they will likely become “mature private funds,” and even permanent elements of the global economy.
However, researchers say that cryptocurrencies are “unlikely” threatening central banks and sovereign currencies and undermining existing monetary structures, especially in countries where sovereign currencies are widely circulated.
According to the analysis, the total value of all cryptocurrencies currently circulating on the market is significantly lower than the value of the main sovereign currency in circulation.
But there are some exceptions. The report mentions Venezuela’s out-of-control inflation and points out that in smaller monetary jurisdictions, cryptocurrencies “can” replace unstable currencies.
In addition, the analysis suggests that financing financial regulators should treat cryptocurrencies as “any other financial transaction or instrument”, considering the potential risks of using cryptocurrency transactions, including money laundering, tax evasion, and illegal activities.