European Parliament: Cryptos Can Be an Alternative to Money

Regulators all over the world may still not have a general consensus on how to treat cryptocurrencies, but things are slowly changing for the better for the market. Bitcoin which has been trading below $6,000 in June is currently back around $8,100.

Cryptocurrencies are gaining steam lately as regulators are now considering cryptocurrencies in a positive light. According to the European Parliament Committee on Economic Monetary Affairs, cryptocurrency can be used as an alternative to money. This statement can be seen in a review that defines exactly how cryptocurrencies work and how it can potentially impact the world’s economy.

According to the statement: “Digital currencies, also known as ‘virtual currencies’ or ‘cryptocurrencies’ can be defined as ‘a digital representation of value, not issued by a central bank, credit institution or e-money institution, which in some circumstances can be used as an alternative to money”.

Central Banks Issuing Cryptos?

The European Parliament also mentioned the possibility that central banks can actually issue digital currencies. It mentioned in its statement that: “The arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the inter-cryptocurrency market, broadening the number of competitors. A potential inadequacy of traditional competition policy to address competition issues in the cryptocurrency markets can be found, suggesting direct public participation through a central-bank digital currency as a remedy.”

Venezuela is among the countries that already offered a cryptocurrency. Petro is an oil-backed cryptocurrency that hopes to solve the problem of the Maduro regime in terms of inflation and economic sanctions.

Regulate vs. Complete Ban

The European Parliament is also against the complete ban of cryptocurrencies. It has been reported not too long ago that the European Parliament encouraged countries to simply regulate the industry and not ban crypto-related activities. Countries such as China banned cryptocurrencies with its fear of capital outflow considering the highly volatile nature of digital currencies.

Japan, on the other hand, worked towards regulating the industry. After the hacking incidents, Japan regulators came up with new rules that would further improve the rules how crypto exchanges operate in the country. In addition to this, regulators imposed stricter rules by banning cryptocurrencies that provide extra anonymity to its users.

Recently, in the US, US Securities and Exchange Commission has considered both Bitcoin and Ethereum not as securities. And for this reason, it doesn’t have to follow the rules and regulations that pertain to financial instrument vehicles such as stocks.

Regulatory clarity is said to be a necessity if we are going to see another bull run for the crypto market. There are already bullish predictions regarding the crypto industry as a whole. In fact, Tom Lee has been saying months back that Bitcoin could actually surpass the near $20K all-time high last December. According to his prediction, Bitcoin is about to reach $22,000 before the year ends.

Now that you have the likes of the European Parliament and G20 slowly releasing statements in favor of Bitcoin and other cryptocurrencies, seeing the market have another bull run isn’t far from reality.