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Central banks plan to regulate cryptocurrency: Member of the ECB Council

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Ewald Nowotny, the current president and governor of the Austrian Central Bank, the Bank Austria, and a member of the Board of Governors of the European Central Bank, recently stated that central bankers and lawmakers are looking into the regulation of cryptocurrency, while taking the floor at the same time. a conference in Florence, Italy.

Nowotny said:

"We wonder if legislators or central banks should intervene, as it happened in China where they banned (the use of cryptocurrencies) because they consider fraudulent. "

ECB board member's comments referred to China's ban on initial offers of coins (ICO) and cryptocurrency swaps in the country, which even forced exchanges to close. As a result, OTC trading has emerged as a popular alternative. China's decision was aimed at limiting the financial risks surrounding the cryptocurrency markets and was partly motivated by its incredible growth this year.

However, the growth of the cryptocurrency ecosystem apparently does not affect Nowotny, which downplayed the potential risk that bitcoin and other cryptocurrency may represent for the broader financial system , since he said the market "is not so big" and can not create financial instability. "

In recent months, the value of bitcoin has soared, so that it has recently reached a new record of over $ 8,100, and that the market capitalization of cryptocurrency reached $ 134 billion. It is hard to say how much bitcoin will go, because at the beginning of the year, it was not even at $ 1,000 a piece.

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Nowotny adds that investors must understand the product because "it's like buying stock on the stock exchange [stock market] … people who invest in this product may suffer losses and if that happens they just have to accept it. covered by CCN, this is not the first time that the governor of the central bank rejects cryptocurrencies.

Earlier this year, in an interview with a regional newspaper, Nowotny said that bitcoin is not a currency because of its instability, while stressing that the central bank did not ban the cryptocurrencies. At the time, he stressed that investors should know in what they engage, as in the past "there have always been cases where such things have broken out".

The comments of the member of the ECB Council are motivated by the lack of control and oversight of the government, which makes education and consumer protection tricky. Mark Haefele, head of UBS investments, said the lack of cryptocurrency ecosystem monitoring presents an "unquantifiable risk" for investors and will not add them to the portfolio of investors. 39, UBS Group AG.

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