Central Banks May Suffer If Bitcoin Fails
Bitcoin is reaching $10,000. In Korea it is trading above this point and may be traded over that level soon. But if this cryptocurrency falls, it may affect the real economy. Bitcoin has a market cap of over $160 billion currently..
“The problem with bitcoin is that it could easily blow up and central banks could then be accused of not doing anything,” said Ewald Nowotny. He informed about making efforts to understand whether bank activity needs to be better regulated.
Nowotny is a well-known Bitcoin critic, who serves on the Governing Council of the European Central Bank. He thinks, that cryptocurrency’s rise is a bubble akin to the tulip mania.
At this moment rules and regulations in Europe allow to buy and sell the cryptocurrencies easily, and the Euro is a small, but steady influx of cash into various digital assets. Additional digital coins, such as Litecoin and others, are available too.
The Bitcoin trading against the Euro is extremely thin, less than 3% of all volumes, compared to the much more active trading of Bitcoin against the Japanese Yen. As other analysts have noticed, compared to the size of forex markets, Bitcoin is tiny, and certainly trading against the Euro cannot affect, for now, the positions of the Eurozone’s common currency.
Central Banks are not ready to accept crypto currencies for now. The most recent outright ban of Bitcoin as a means of payment is from Morocco.