At a time when the world is working over numerous speculations regarding cryptocurrencies, the European Union has come up with a warning about their future.
A report released by the European Parliament, titled Competition in the Area of Financial Technology, says that if banks and central banks were to get onboard the cryptocurrency revolution by introducing their own digital coins, it would mean the end for the likes of bitcoin.
The arrival of permissioned bank tokens would surely increase the competitiveness in the market and reshape the current situation. However, due to the power of banks through traditional banking services, competition could be restricted in the market space through pre-emptive acquisitions or predatory pricing schemes.
The report was circulated by the European Parliament Committee on Economic and Monetary Affairs (Econ), which looks upon the policies made by the European Union Central Bank. The report provides information on cryptocurrencies as well as finance, banking, wealth management, insurance, and forex.
Bitcoin, the largest cryptocurrency in the world, is supposedly at great risk according to the report. This is due to a lack of competition in the mining industry, where a huge 79% is controlled by just five mining pools. Further warning over cryptocurrency future highlighted the global nature of markets acting strange to European competition policy.
This is because most of the players operate from global locations that are far from Europe. Hence, the jurisdiction and prosecution of such organisation, in case of misconduct or anti-competitive behaviours, becomes difficult.
The main weakness of Europe is the concentration of mining activity on non-European countries. Apparently, the presence of miners is much less in Europe as compared to the number of miners in other parts of the world. Europe leads in the supply of wallet and exchange services at international level. Yet, the absence of miners does create a major drawback in regulation.
These warnings have come up in spite of the rise in Bitcoin prices. Even Bitcoin Cash has been soaring up quite well this year, with prices rising more than a few other cryptocurrencies. Moreover, Europe will lead a new front in cryptocurrencies with Bulgaria launching the world’s first crypto ATMs and Slovenia becoming home to the first Bitcoin city.
Yet, this must be noted that Europe is a large crypto-market which can impact the situation globally. If such warnings do mean a thing, then it could be hard days for this non-conventional monetary system.