European Central Bank governing council member Ewald Nowotny said on Thursday that legislators and central bankers are discussing whether they should intervene to regulate cryptocurrencies, as China already has done.
“We’re asking ourselves if legislators or central banks should intervene, as happened in China where they banned (the use of cryptocurrencies) because they consider them fraudulent,” Bank of Austria’s Nowotny said at a conference in Florence.
Chinese authorities in September ordered Beijing-based cryptocurrency exchanges to stop trading, in a move aimed at limiting financial risks surrounding the highly speculative market that has grown rapidly this year.
However, Nowotny played down the possible risks cryptocurrencies such as Bitcoin represent for the wider financial system: “This market is not so large, so it cannot create financial instability,” he said, adding that investors needed to understand the product.