Bernard Durkan
Question:66. Deputy Bernard J. Durkan asked the Minister for Finance if particular issues arise for the euro from the emergency of bitcoin; and if he will make a statement on the matter. [10883/21]
View answerThursday, 25 February 2021
Questions (66)
Written answers
Continuous developments in distributed ledger and blockchain technologies, like Bitcoin and stablecoins, are being considered at EU level both for the risks that may present, but also the opportunities.
Bitcoin is almost 12 years old. The recent interest in this cryptocurrency, and its meteoric and highly volatile increase in value, may have been fuelled by a combination of factors:
- Increased digitalisation and more time spent online – as a consequence of COVID-19 restrictions on business and personal lifestyles.
- Declining cash usage – the pandemic has boosted not only the use of credit and debit cards, but contactless payments.
- Investors seeking new avenues, asset classes and transactions to earn financial yields.
This is not a new phenomenon that has emerged recently. Indeed, the European Central Bank has been analysing the crypto-asset phenomenon (not only Bitcoin) with a view to identifying and monitoring potential implications for monetary policy and the risks that crypto-assets may pose to the smooth functioning of market infrastructures and payments, as well as for the stability of the Euro financial system as a whole. To that end, it established in 2018 the Internal Crypto-Assets Task Force with a mandate to deepen the analysis of crypto-assets.
Furthermore, in 2020, the European Commission and the European Central Bank announced that they were pursuing efforts towards ensuring a strong and vibrant European digital finance sector and a well-integrated payments sector to respond to new payment needs in Europe. The Digital Finance package, announced in September 2020, includes a draft regulation proposal for Markets in Crypto Assets. This proposal intends to regulate crypto-assets that may have a “payment” purpose and adequate supervision and consumer protection measures are included in this regulatory proposal.
Finally, in January 2021, the ECB and the EU Commission announced that they are collaborating in exploring the possibility of issuing a digital euro, as a complement to cash and payment solutions supplied by the private sector. The project will involve a review at technical level of a broad range of policy, legal and technical questions emerging from a possible introduction of a digital euro.