European Central Bank publishes Bitcoin risk report

Earlier last week, the European Central Bank published a new report on the financial stability of the European Union. The report, titled Financial Stability Review (FSR), explains the potential risks of Bitcoin and other crypto-related assets. Against the backdrop of the larger economy, the ECB said that "signs of enthusiasm" in crypto assets are potential concerns, but the risks to financial stability are limited. "Although financial stability appeared limited, there were signs of enthusiasm in the renewal of interest in crypto assets." While the European Central Bank argues that cryptos pose little or no risk, other governments see their increased use and transaction values as a threat to their sovereignty. As Bitcoin and other cryptocurrencies hit record highs earlier this year, the Indian government made a direct ban threat. When the Turkish lira fell and the Turkish people flocked to crypto assets for a safe haven, the country took action to ban its use. On the other hand, South Korea has imposed strict regulations that halt Okex and Binance's activities in the country. The list continues. Related reading | Analyzing what South Korea's cryptocurrencies mean for the industry The ECB addresses potential Bitcoin bubble, corruption and environmental risks The Federal Reserve noted that one of the main issues facing Bitcoin and cryptocurrencies is their volatile and speculative nature – the increase in tulip frenzy . Related Reading: Deutsche Bank Turns Against Bitcoin In The Midst Of 50% Down: Valuation is a 'wishful thinking' overshadowed, ”says. The risk assessment on its volatility seems more relevant than ever. Source: Tradingview.com "Excessive carbon footprint of [Bitcoin] and its use for possible illegal purposes.

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