Over the course of 2017, Bitcoin has evolved into so much more than just a concept or whitepaper. The past few months have shown a lot of adoption when futures contracts were finally in place for the cryptocurrency. Resistance to the technology had also surfaced when the issue of volatility got the attention of major banks which forced them to ban the cryptocurrency.
Just this week, European Central Bank’s president – Mario Draghi - took a stand and said that European banks may hold positions in bitcoin as more developments come in – one major one being the listing of Bitcoin future contracts by US exchanges. A recent move by CME Group – the world’s largest derivatives exchange was to list bitcoin futures contracts last December right after CBOE did the same a week earlier.
ECB President Mario Draghi stated the following:
“However, recent developments, such as the listing of Bitcoin futures contracts by US exchanges, could lead European banks too to hold positions in Bitcoin, and therefore we will certainly look at that.”
This statement of Draghi bears quite the weight even though this was followed up by a negative remark, deeming it unregulated and very risky.
Risk is not an absolute negative, and this much can be said of his comment stating ECB’s Single Supervisory Mechanism may be deployed to identify “potential prudential risks” digital assets may bring to banks or institutions.
This much aligns well with the intentions previously expressed when he stated that ECB does not have authority to regulate bitcoin. The tone of his remarks suggests more of a supervisory approach to the volatility and overall nature of cryptocurrencies such as bitcoin.