Based on the EU Central Bank, Europe Must Not Promote Digital Currencies!
Right in a legal opinion that was recently published by the European Central Bank in which is the ECB, the Union’s apex bank has delineated various of the reasons it believes that the European Union members must not promote the use of the digital currencies.
Even though the ECB recognizes that the technological advances in associating right with the distributed ledger technology and that has been underlying the alternative means of payment similarly to the virtual currencies may have been the potential to ascend the efficiency, reach and choice of the payment and also the transfer methods, as it presaged that, “… the Union legislative bodies must take care not to appear on promoting the use of the privately reputable digital currencies similarly as the alternative means of payment are neither legally established as currencies, nor they constitute the legal tender issued by the central banks and the other public authorities.”
Some of its other concerns also includes the higher instability that is linked with the virtual currencies in which does not always seems to be associated to the economic or the financial factors and also the lack of the guaranteed right for the holders of the virtual currency that they will be able to exchange their units for the goods and the services or any other legal currency in near and approaching future
As based right on the aspect that the virtual currencies could positively affect the control. The opinion states that, “… the reliance of the economic actors on the virtual currency units. If substantially amplified right shortly could in principle affect the central bank's’ control right over to the supply of the money with the potential risk of the price stability, even though the under and current practice this particular risk is limited. As a consequence, while it is really appropriate right for the Union legislative bodies, the consistent together with the FATF’s recommendations to be able to regulate the virtual currencies right from the anti-money laundering and also the counter-terrorist financing perspectives and they must not look for this particular context to promote a wider usage of the virtual currencies.”
The ECB’s opinion is into the response to requests that is made by the Council and the European Parliament right on a proposal for a directive amending Directive (EU) 2015/849 in which centers right onto the prevention of the use of the financial system right for the money laundering or the terrorist financing. The proposed directive expands onto the lists of the obliged entities to which an EU Directives applied and also to be able to include the providers and engaged the primarily and the professionally right in the exchange services between the virtual currencies and the fiat currencies. And it also requires the Member States to fully ensure that the providers of the exchanging services right between the virtual currencies and the fiat currencies and the custodian wallet providers are licensed or the registered.This is actually based right on the various views in including the virtual currencies that do not qualify as the currencies right from the Union’s perspective but also could be regarded as the means of an exchange and rather than as a means of payments and that the terrorist and the criminal groups are currently been able to transfer money right within the virtual currency networks by concealing the transfers or by benefiting from a particular degree of the anonymity on such exchange platforms. It also says that the use of the virtual currencies also poses the greater value of risks than the traditional means of payment in the sense that the transferability of the virtual currency relies right onto the internet and is limited only by the capacity of the particular of the virtual currency’s underlying network computers and the IT infrastructure. It also stresses that the inability to cover the virtual currency transactions by any single of the control measures that is provided right for the proposal could provide a means of financing illegal activities.