Regulators and governments around the world are very carefully studying cryptocurrencies. Bitcoin and altcoins — a new invention which brings a revolution in the financial world, and States need to understand how they can best be integrated into the economy.
This time the European Committee on economic and monetary Affairs stated that the virtual currency can be used as an alternative to money. The main objective of this study was to analyze the impact that can have cryptocurrencies on the economy.
According to the official statement, cryptocurrencies have value, which is determined by the laws of supply and demand. At the same time, they can be exchanged for other goods, services and sovereign currency.
The report States:
“Digital currency, also known as “virtual currency” or “cryptocurrency” can be defined as” a digital equivalent value, not issued by the Central Bank, credit institution or electronic money institution, the products of which in some cases can also be used as an alternative to money.”
In addition, the Committee explained: the emission is controlled by computer algorithms that helps to create a deficit in the future to increase the value. Recall that emission of Bitcoins — 21 million units. As soon as the market will get more and more people and investors, the amount of BTC will decrease. This will lead to an increase in its prices.
“The value of cryptocurrencies is determined by the law of supply and demand, and it is not supported by any monetary authority that is called decentralization,” — said in a statement. — Generation of new blocks is often controlled by computer algorithms, which help to create a deficit to maintain values. A common feature of various digital currencies is the use of a DLT “.
Moreover, cryptocurrencies are considered to be innovative and destructive. They work decentralized, as uncontrolled by any Central authority or Bank
Another important thing mentioned in the Committee related to the regulation. They recognize that it is difficult, and that this is a difficult topic to discuss. In addition, the European authorities are concerned about the concentration of mining outside Europe.