The European Central Bank Wants Tighter Control over Bitcoin

According to an article (link below) : "The European Central Bank (ECB) has proposed a directive of the European Parliament and of the Council stating that ‘virtual currencies do not qualify as currencies from a Union perspective,’ and wants digital currencies to be explicitly defined as not legal currencies or money... the use of digital currencies, such as bitcoin, pose a threat as terrorists and criminal groups are able to transfer money within digital currency networks with a certain level of anonymity."

Because of this, the ECB is discouraging the promotion of Bitcoin.  

The European Central Bank is right to be concerned with terrorism and money laundering. But isn't that domain primarily the concern of law - enforcement and other more appropriate branches of policy makers? 

I'm not exactly sure if their reasoning is sound because most illegal activities, without bitcoin, is done by cash, anonymously and relatively untraceable... at least digitally. Drug dealers don't transact using credit cards or bank transfers where their activities are tracked from what things like the ECB have control over or access to. In war zones, transactions are mostly in cash. 

What the ECB is doing now, is basically saying, let's not help promote Bitcoin because we do not control it. But that's one appeal of Bitcoin: groups of people, representing a narrow interest, cannot control it. It is a hedge against political and economic institutions when they fail. 

I think this sends out a message to potential investors and innovators to put on hold the development of technologies that takes advantage of Bitcoin. 

Bitcoin is an attractive alternative to existing currencies for many reasons. The ECB is using it's trusted brand to discourage the use of Bitcoin for the sole reason that it does not have controls on it. If, as a Central Bank, that's how their members feel about it, they are well within their rights to choose not to promote Bitcoin. However, transactions and the development of products and services for Bitcoin must not be hindered just because a Central Bank does not have influence over it. 

Associated articles

  • www.cryptocoinsnews.com/the-ecb-wants-tighter-control-of-digital-currencies/