In its latest report about the virtual currency schemes (VCS), European Central Bank concludes that, despite the hype, virtual currencies pose no material risk for any of its tasks, including promoting the smooth operation of payment systems. This is largely because bitcoin and its 500-odd imitators are still barely used. Bitcoin is tapped for around 69,000 transactions per day worldwide, compared with a total of 274 million non-cash retail payment transactions per day for the EU alone.
According to the report, „the usage of VCS for payments remains limited for now, which implies that there is not yet a material risk for any central bank tasks, including promoting the smooth operation of payment systems. However, a major incident with VCS and a subsequent loss of trust in VCS could also undermine users’ confidence in electronic payment instruments, in e-money and/or in specific payment solutions.”
VCS such as Bitcoin, are not full forms of money as usually defined in economic literature, nor are virtual currencies money or currency from a legal perspective. Nevertheless, VCS can/may substitute banknotes and coins, scriptural money and e-money in certain payment situations, according to the latest ECB’s report called „Virtual currency schemes – a further analysis”.
The general consideration of the ECB’s report on virtual currency schemes (2012) was that, although VCS can have positive aspects in terms of financial innovation and the provision of additional payment alternatives for consumers, it is clear that they also entail risks.
With around 500 decentralised VCS now, the number has dramatically increased. Most of the new ones are copies of Bitcoin with only minor modifications. Participation in VCS exposes users not only to key payment system-like risks but also to a range of other risks emanating from the characteristics of VCS.
In particular, users are exposed to exchange rate risk related to high volatility, to counterparty risk related to the anonymity of the payee and to investment fraud risk related to the lack of transparency. In short, there are both general and specific ways in which users could lose their entire virtual currency holdings.
Some aspects of these risks are inherent to the VCS concept and the risks mostly remain unmitigated by legislation, regulation or supervision.
The reactions from national authorities to the phenomenon vary, partly depending on the part of the world these originate from and on the type of authority. Responses range from warnings about risks, statements and clarifications on the legal status, licensing and supervision of VCS-related activities, or the banning of those.
In order to establish clarity on virtual currency and related aspects, the ECB would welcome clarification by each respective authority as to how the relevant legislative, regulatory and supervisory frameworks apply to virtual currency schemes, and amendment of these frameworks if needed. For its own tasks in the field of payment systems, the ECB does not see the need to amend or expand the current EU legal framework related to these tasks.
The ECB recognises that, besides their drawbacks and disadvantages, VCS could also have some advantages over traditional payment solutions and specifically for payments within virtual communities/closed-loop environments and for cross-border payments. As such, it is not excluded that a new or improved VCS may be more successful in future. Therefore, the Eurosystem will continue monitoring developments, notably for payments-related aspects of VCS.
„Tendinţele pe care le-am remarcat înainte de începerea pandemiei s-au accelerat pe perioada stării de urgenţă. Am văzut acest lucru ca o oportunitate, un tipping point pentru bancă. Post-pandemie nu avem cum sa ne întoarcem la comportamentul financiar pe care îl aveam până în februarie a.c. Relaţia românilor cu online-ul s-a schimbat. In plus, cardul fizic se va dematerializa. Vom asista la o scădere a cererii pentru cardurile fizice, respectiv la o creştere a preferinţei pentru componenta digitală a acestora.”