There is no doubt that cryptocurrencies have come a long way over the past few years and are now legitimately regarded as an important corner of the global financial market. However, it is also important to note, that with the rise in popularity, regulations also become a reality, and that is something plenty of regulators have been planning over the past couple of years. Most recently comes the European Central Bank, or ECB, into the mix.
While it is true that the cryptocurrency community, in general, is against regulation of any kind, it is also true that as the market grows, there are bound to be certain checks and balances. In a new development, the European Central Bank, which is one of the world’s most influential central banks, stated that it is exploring ways in which cryptocurrencies could be monitored.
In a report published on August 7 and titled “Understanding the crypto-asset phenomenon, its risks and measurement issues”, the ECB stated that the absence of reliable data with regards to the entire crypto market will prove to be a significant challenge for regulators in the years to come. Hence, central banks all over the world need to monitor cryptocurrencies both on-chain as well as off-chain and help fill those data gaps that have confounded regulators all over the world.
Although the report did note that cryptocurrencies are public in nature, it added that monitoring the data would require a far more robust ecosystem from the central banks. The report argued that reliable data of transactions with regards to cryptocurrencies is not always available, and hence, a robust system would be needed. Considering the rate at which the crypto market is rising, it is fair advice. These are an important development for the crypto community at large, and although many might be opposed to it, such steps should ultimately make the marketplace a much more reliable one.
What do you think about the ECB’s decision?
Featured image: DepositPhotos © sinenkiy