In a report released this week, the European Parliament has stated that cryptocurrencies aren’t going anywhere and warned lawmakers not to ban or ignore them.
The report was commissioned by the Economic and Monetary Affairs Committee and is entitled ‘Virtual Currencies and Central Banks Monetary Policy: Challenges Ahead’. The introduction begins:
Less than a decade has passed since the development of Bitcoin, the first private decentralized digital currency with a global reach. Despite many skeptical opinions, this experiment has survived, enjoys broad popularity, and has found many followers.”
Confusingly, the report refers to cryptocurrencies as VC’s (virtual currencies) due to the authors being of the opinion that the term cryptocurrencies is misleading and may have a ‘pejorative meaning’. It goes on to define cryptocurrency as a form of private money and praise it’s technological properties, calling the networks safe, transparent and fast.
Details on the EU’s plans for monitoring usage and furthering legal projects to eradicate anonymity are also included. The authors are certain the technology is here to stay and go to lengths to show their support for it, pointing out that those who believe all cryptocurrency activity is illegal should not generalize.
Dismissing the Naysayers
Most interestingly, the report specifically singles out economist and longtime crypto demoter Robert Shiller and political professor Robert Skidelsky for their attempts to dismiss cryptocurrency, calling them mistaken.
The report also expounds upon the much-discussed topic of whether cryptocurrencies can be considered real money. According to traditional definitions discussed in economic literature, cryptocurrency doesn’t fit some of the basic functions of money. Due to its volatility, it can’t be considered a true store of value and it is only used as a means of payment to a very limited extent.
The report states, “On the other hand, one cannot exclude the possibility that a number of users and transactions will increase to the extent that VCs will become a fully-fledged substitute of sovereign currencies in the future.”
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