According to Reuters, the European Central Bank (ECB) is considering regulating the use of digital currencies. Governing council member Ewald Nowotny commented:
“We’re asking ourselves if legislators or central banks should intervene, as happened in China where they banned (the use of cryptocurrencies) because they consider them fraudulent.”
On bans and other schemes
It should be noted that China never banned the use of cryptocurrencies; rather, the country shut down digital currency exchanges and forbade the launching of ICOs. That’s a far cry from a ban on use, which would be impossible to enforce. One also wonders about the wisdom of basing Europe’s regulatory scheme on actions taken by the world’s largest Communist country.
Fortunately, Nowotny realizes that the cryptocurrency market is small enough not to destabilize the traditional financial system. Regulators feel significantly less urgency - and are more inclined to take a laissez faire approach - when there is no risk of systemic collapse.