ECB's Constancio compares Bitcoin to Dutch tulip mania

Bitcoin SE

22/09/2017 16:24

By Francesco Canepa 
    FRANKFURT, Sept 22 (Reuters) - Bitcoin is not a currency but 
a mere instrument of speculation, the vice president of the 
European Central Bank said on Friday, comparing the digital 
currency to tulip bulbs during the 17th century trading bubble 
in the Netherlands. 
    The dollar value of the Bitcoin has nearly trebled this year 
and, while its adoption has yet to pick up in a significant way, 
the rise of this cryptocurrency is worrying central bankers 
across the world. 
    But ECB Vice President Vitor Constancio denied it posed a 
threat to monetary policy and compared its rise to to the 'Tulip 
mania' seen three-hundred years ago. 
    "Bitcoin is a sort of tulip," Constancio said at an ECB 
conference. "It's an instrument of speculation ... but certainly 
not a currency and we don't see it as a threat to central bank 
policy." 
    The ECB said year last year digital currencies, which are 
generally issued by private companies and only exist in 
electronic form, could in principle erode its power over the 
supply of money, inviting European Union lawmakers to tighten 
proposed rules on the matter. 
     Earlier this month, President Mario Draghi quashed an 
Estonian proposal to launch a government-backed cyrptocurrency, 
saying the only valid money in the euro zone was the euro.  
    Last week, Chinese authorities ordered Beijing-based 
cryptocurrency exchanges to stop trading and immediately notify 
users of their closure, signalling a widening crackdown by 
authorities on the industry to contain financial risks. 
 
 (Reporting By Francesco Canepa; Editing by Toby Chopra) 
 ((@FranCanJourno francesco.canepa@thomsonreuters.com; 
004906975651247; Reuters Messaging: 
francesco.canepa.thomsonreuters.com@reuters.net)) 
 
Keywords: ECB BITCOIN/STABILITY