Bitcoin is still the biggest cryptocurrency in the world but that may soon change. The EU (European Union) issued concerning warnings about central banks affecting the future of bitcoin and similar cryptocurrencies.
The Possibility of Bank-Owned Cryptocurrency
The concern is that if banks developed their own cryptocurrency, bitcoin and similar digital currencies could be in trouble. This possible competition from banks and central banks could limit competition in the electronic cash market. Banks could outprice bitcoin and similar competitors or deny certain services, meaning there would be no access to exchanges or wallets.
A report from the Police Department for Economic, Scientific, and Quality of Life Policies states there also may be significant problems when it comes to the lack of competitors in cryptocurrency mining.
Impacts on Mining Activity
The report states that cryptocurrencies are difficult to oversee due to their international nature, creating obstacles for the European competition policy as many anti-competitive businesses work outside of their jurisdiction.
The report states, “Europe leads, at an international level, the supply of wallet and exchange services […] nevertheless, the main weakness of Europe is the concentration of the mining activity on non-European countries.”
The FSB (Financial Stability Board), an international collective in charge of monitoring the global financial system and consisting of members from the G20 major economies, stated its intention to observe cryptocurrency assets at banks and in the largest financial systems.