ECB: Bitcoin has to become important before it affects policy making

Since the rise of virtual currencies in the past couple of years, the European Central Bank (ECB) has been quite adamant in maintaining an eye on bitcoin and other digital currencies. Despite the growth of the adoption rate, the European monetary authority made the case that bitcoin is still unimportant on the grand scale of things, which means it doesn’t have much effect on the bank’s policies.

Delivering a prepared speech to a conference Monday held by the Bank of Italy in Rome, ECB board member Yves Mersch stated that bitcoin has gained significant value recently, but cited a 2012 report that concluded these alternative currencies still remain economically unimportant.

Bitcoin“In Europe, virtual currencies do not pose a risk to price stability or financial stability,” said Mersch. “Nevertheless, we are closely following developments and keeping in touch with other authorities.” He added that they “are an interesting phenomenon and should not be ignored or dismissed.

In his remarks, he reiterated what the ECB and other central banks have warned in recent months: speculation, security vulnerabilities and price volatility pose significant risks to consumers and investors.

The Federal Reserve and the Treasury Department have confirmed what Mersch said in his speech: bitcoin’s insignificance to monetary policies continues to allow bitcoin to not be regulated by United States authorities, even though there have been calls for regulation, controls and perhaps even prohibitions.

At the time of this writing, bitcoin is trading at approximately $565.