The report continued that most banks in the EU do not own a signigicant amount of crypto-assets. Importantly, the cryptocurrencies do not serve the same function as money.
The report continued that currently, a very small amount of merchants currently allow buying of goods and services with bitcoin. As such the coin has little “effect on EU economy” or on monetary policy.
The central bank says:
“The high price volatility of crypto-assets, the absence of central bank backing and the limited acceptance among merchants prevent crypto-assets from being currently used as substitutes for cash and deposits, as well as making it very difficult for crypto-assets to fulfil the characteristics of a monetary asset in the near future.”
The bank’s report continues:
“Crypto-assets cannot be used to conduct money settlements in systemically important FMIs. To the extent that they do not qualify as securities, central securities depositories (CSDs) cannot undertake the settlement of crypto-assets. Even if crypto-assets-based products were to be cleared by central counterparties (CCPs), these would need to be authorised and to satisfy existing regulatory requirements, albeit at additional costs and with no clear benefits to EU CCPs.”
Speaking on stablecoins, the ECB made it known that once banks start to collateralize them they will become less volatile. However, it is of the belief that this is not the right move as “Such collateralisation could result in additional demand for central bank reserves, which could have implications for monetary policy and its implementation.”
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