Can, in not too distant future, the European Central Bank become a decentralized autonomous organization?
In Part 1 of the article “ How the European Parliament Views Blockchain ” we looked into how Euro Parliament has taken on cryptocurrencies in its latest report. Here, in Part 2, we continue to analyse it.
The European Parliament is looking at cryptocurrencies as a means to conduct transactions faster and cheaper, assuming that cryptocurrencies can help lower borders within the European market. Diminishing role of banks
But this assessment ignores how Bitcoin redesigns and diminishes the role of banks and central banks. The euro could draw inspiration from Bitcoin’s decentralized approach.
The European Parliament, similarly to banks, sees in cryptocurrencies a new technology to run cross border transactions faster and cheaper. Next to this positive outlook a major point of concern, however. is the governance of cryptocurrencies. The ‘Bitcoin Model’ of a community-driven system with miners, users, developers and merchants deciding on future directions doesn’t seem a satisfactory framework for Europe’s citizens.
The report says: ‘… Bitcoin …creates uncertainty and consumer or – more broadly – user protection problems, especially in the event of challenges unforeseen by the original software designers.’ Beyond central banks
Many citizens and end users might, on the contrary, find an appealing concept in cryptocurrency being out of the control of banks and central banks. Especially in periods of inflation, cryptocurrencies offer an attractive alternative.
Throughout the report of the European Parliament, there is little to find onvmacro-economic and monetary aspects of cryptocurrencies. Where it is mentioned clearly there is a concern as it assumes that cryptocurrencies could diminish the role of politics in the financial sector: ‘the potential long-run future limitations on the effectiveness of monetary policy if private VC schemes were to be widely used as a substitute for official fiat […]
