Despite bitcoin’s latest worth rally, the world’s largest cryptocurrency remains troubled to achieve mainstream adoption, and currently, the European Union (EU) has warned bitcoin and different decentralized cryptocurrencies might be derailed by the world’s central banks.
A report on fintech competition, commissioned by the ECU Parliament Committee on Economic and Financial Affairs (Econ), that oversees the selections created by the EU’s central bank, found that if banks and central banks were to issue their own cryptocurrencies it might be unhealthy news for the likes of bitcoin.
“The arrival of permission cryptocurrencies promoted by banks, even by central banks, can reshape this competition level within the cryptocurrency market, broadening the quantity of competitors,” the report authors at the local department for Economic, Scientific, and Quality of Life Policies wrote.
“However, the market power of banks in ancient banking services could be wont to limit competition within the cryptocurrency market through pre-emptive acquisitions or predatory valuation schemes.”
Central and commercial banks might price out bitcoin and different cryptocurrencies or institute denials of service, wallet for users.
According to the report, the international nature of cryptocurrency markets is additionally a challenge to European competition policy.
“Many of the players operate from international locations outside the jurisdiction of European competition authorities, that makes investigation or prosecution.
The EU report follows a paper from the international monetary watchdog, the Financial Stability Board out last week that found bitcoin and cryptocurrencies don’t presently cause a risk to the worldwide national economy.