After requested research and analysis, a new report for the Economic and Monetary Affairs Committee of the EU Parliament warn lawmakers to not ignore or attempt to ban virtual currencies like cryptocurrencies. The report, specifically provided by Policy Department A, was published under the title Virtual Currencies and Central Banks Monetary Policy: Challenges Ahead, and authored by Marek Dabrowski and Lukasz Janikowski.
The report considers cryptocurrencies and other virtual currencies as a contemporary form of private money that is carving it’s permanent place in society. While the report acknowledges the benefits of currencies like Bitcoin to be relatively safe, transparent, and fast, it also states that the anonymity behind crypto can pose challenges for regulators.
The authors of the report also urge economists and regulators not to downplay the disruptive potential of new cryptocurrencies.
“The economists who attempt to dismiss the justifications for and importance of VCs (virtual currencies), considering them as the inventions of ‘quacks and cranks’, a new incarnation of monetary utopia or mania, fraud, or simply as a convenient instrument for money laundering, are mistaken. VCs respond to real market demand and most likely will remain with us for a while. Policy makers and regulators should not ignore VCs, nor should they attempt to ban them.”
They also state that given the global, trans-border character of virtual currencies, any attempts to ban them would definitely result in failure. As a solution, it is recommended to tax cryptocurrencies similarly to other financial assets and synchronize regulations across jurisdictions.
According to the report, the top 5 cryptocurrencies are Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Litecoin, and also gives a run down on each currency, their technology, and growth.
The issue of Bitcoin posing a threat to central banks is also touched upon with the authors concluding that this will most likely not be an issue. The differences in capitalization and usage between cryptos and sovereign currencies are clear enough that monetary dominance of major banks and currencies will remain unchallenged.
You can read the full report here.