Last week, we reported of the European Parliament commissioned a Report on digital currencies. Now a second Report has surfaced, however, a different team of authors has written. We compare the findings from both Reports and make the analysis on the Actions of the EU Parliament can have an impact.
The Committee on the economy and currencies of the European Parliament (ECON) gave a report on digital currencies in order. This In-Depth Analysis is intended to give the Committee recommendations for action for dealing with virtual currencies in the European economic and financial policy. Last week, we wrote about the analysis created by the Kiel Institute for the World Economy. Now, we consider the development of the Center for Social and Economic Research, which puts a slightly different emphasis in the analysis.
Two analyses, two considerations
In the analysis of the Kiel Institute, the distinction between digital currencies and crypto-state currencies are in the centre. So a crypto-currency is a special form of digital currency that uses cryptographic functions. In the evaluation, the Team from the Kiel Institute distinguishes between the two terms. While a digital currency in General, is seen as potentially profitable for the banking system, crypto-currencies viewed with skepticism. So the analysts don’t trust it, for example, the Bitcoin, to be in the future a serious Alternative to national currencies.
The root note in the second analysis is clearly tuned to be more optimistic towards crypto-currencies. Thus, the analysis Team writes from digital currencies means the currencies in the majority of cases, Crypto. This is clear, as it means that, digital currencies are based in many, if not all, of the cases on the Blockchain technology. Thanks to this, you were relatively safe, transparent and fast. The analysts compare crypto currencies with paper money since the 18th century. and 19. Century in circulation. In contrast, crypto-currencies globally and across borders to be usable.
The Center for Social and Economic Research agrees with the Kiel Institute that the role of crypto-currencies as the Transaction will remain for the time being, limited. You don’t have to justify it so that it is in wide enough acceptance for crypto-currencies. The store of value function of crypto will benefit from the primary use of currencies remain field – what long-term investors. Here, too, you don’t trust the Bitcoin and other crypto-currencies, the demand for Central Bank money out. An exception to economies in which political or economic crises, hyperinflation or other problems. Here crypto-currencies could be the failure of the traditional institutions of the field.
Guidelines for the European regulator
The report on the impact of crypto-currencies on the European economy and financial policy was given to the European Parliament in order. Accordingly, recommendations for action by European regulators. The analysts address the Fears of financial market regulators-money laundering activities, tax evasion and the financing of illegal activities. In addition, they wanted to prevent fraudulent financial products come in the Form of crypto-currencies on the market. However, the Report also argues for the crypto scene under a General suspicion.
In most cases, the cryptographic TRANS-actions from the free choices of market participants. Accordingly, regulators should assess you according to the same rules as other financial transactions. An Investment in crypto you should be a tax on currencies, therefore, also the same as in other financial products. At the same time, currencies – in the face of global and cross-border use of Crypto – collaboration of multiple jurisdictions is recommended. For this action the recommendation of the EU Parliament is in any case, the appropriate addressee.