ECON published a report on cryptocurrencies

The European Parliament's Economic and Monetary Affairs Committee (ECON) has released a 30-page report on cryptocurrency entitled “Virtual currencies and central bank monetary policy: the challenges ahead.” The report's conclusion is that cryptocurrencies are unlikely to replace fiat even in the long term.

ECON is the body to which the European Central Bank reports. It is currently led by Italian Roberto Gualtieri.

The report begins with the assertion that, contrary to many people's expectations, the “bitcoin experiment” has not only survived, but has expanded beyond niche status. The report's author blames the 2017 price surge.

After examining the technology behind three cryptocurrencies—bitcoin, ethereum, and ripple—the authors conclude that virtual currencies “have no intrinsic value because they are not associated with traded goods or any sovereign currency.” However, they recognize that fiat currency also does not have these characteristics.

The classic definition of money consists of three points. Money must be:

a means of payment

a unit of account

a store of value.

Some argue that cryptocurrencies do not or do not fully meet these criteria. Despite this, the report argues that digital currencies have the potential to solve this problem in the future.

The report also points out the advantages of cryptocurrencies - the authors believe that their main positive qualities are the accessibility of financial services and the elimination of the possibility of identity theft. The article also points to advantages such as speed, cost and accessibility of payments, however, given current technological advances, traditional payment systems can also boast such characteristics.

The report states that cryptocurrencies are fundamentally private money, and past experiments with private money have failed for a number of reasons. This statement echoes one made by Nobel Prize-winning economist Robert Shiller of Yale University. However, the authors expanded this statement by stating: "Unlike previous attempts, modern private money issuers are able to provide a transparent, relatively secure, fast and inexpensive mechanism. Digital currencies have a better chance of successcompared to their 18th and 19th century predecessors"..

European Union countries disagree on the regulation of cryptocurrencies. The central government is working to create appropriate laws that will help govern cryptocurrencies across the continent, and this report is the result of that process. Last week it issued its fifth anti-money laundering directive, giving local financial regulators greater powers to access customer information. 

According to financemagnates.com