European Central Bank: Bitcoin isn't a threat, cryptocurrency not a new asset class

The European Central Bank, Eurozone's chief financial regulator, has released its report on cryptocurrencies and their implications on the financial stability of the region.

The European Union has been much more neutral when it comes to cryptocurrencies, and, unlike the US, has passed no specific legislation regarding the new asset class.

The European Central Bank, the Eurozone's main financial regulator, has taken on the responsibility of conducting a thorough review of the market every few years.

The main takeaway from ECB's report is the fact that the regulator described cryptocurrencies as not being a threat to Europe's financial stability.

"The ICA-TF analysis shows that crypto-assets do not currently pose an immediate threat to the financial stability of the euro area. Their combined value is small relative to the financial system, and their linkages with the financial sector are still limited."

The European Central Bank found that Bitcoin and other coins posed no threat to the financial stability within the union.

There is no need to read between the lines, either-the report acknowledged that DLT and other innovative technologies have the potential to increase the efficiency of financial intermediation and the financial system as a whole.

Blockchain technology's potential application in the financial system didn't convince the ECB that cryptocurrencies themselves were a legitimate financial instrument.

Having such a high-profile financial institution say Bitcoin is not a threat to economic stability isn't winning a war.

The crypto industry cannot be regulated until central banks and other financial authorities recognize digital currencies as financial instruments and acknowledge their value in the market.