Virtual currency warnings
The European Central Bank (ECB) has warned against the negative impact of virtual currency schemes on the stability of central banks in a report entitled “Virtual Currency Schemes October 2012”.
While acknowledging that many of these schemes are not big enough to influence price or stability, the ECB raised concerns about the level of credit, operational and legal risks they can visit upon users. It has called for more regulation to be drawn up to monitor technology developments and currency creation which includes schemes such as Bitcoin and Linden Dollars.
The report said: “Owing to the small size of virtual currency schemes, these risks do not affect anyone other than users of the schemes. This assessment could change if usage increases significantly, for example if it were boosted by innovations which are currently being developed or offered. As a consequence, it is recommended that developments are regularly examined in order to reassess the risks.”
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