Yves Mersch: Banks Must “Segregate” Cryptocurrency Transactions as They Couldnt Be Seen As ‘Money’

According to Reuters ‘ report dated May 14, ECB board member Yves Mersch stressed that banks must “segregate” their commercial transactions with crypto money from other transactions.

Mersch stated that the tokens could not be “seen as money” because the crypto market had too much ambiguity, and that those who used it, as well as traders, banks, stock exchanges and intermediary institutions should be supervised.

Using Cryptocurrencies as Collateral

According to Mersch, even in January 2018, when the market, which is known as 432 million dollars by Merch but actually reached 800 billion dollars, reached its peak market volume, this figure was too low to threaten financial stability. However, according to Mersch, if crypto currencies are used as collateral for issuing bank loans or for transactions with brokerage firms, then such actions can be opened to the discussion of protecting separately from other commercial transactions and investments.

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As Reuters pointed out, European banks controlled by the ECB are not currently issuing any cryptographic money transactions. In the US, investment bank giant Goldman Sachs announced that they would open a crypto money trading office in weeks.

Despite all these worries of Mersch, ECB’s Supervisory Board Chairman Daniele Nouy said in an interview with CNBC, that the possibility of trading in cryptographic currencies in the future is very low.

In March, the ECB and BIS issued a statement on Bitcoin and central bank-supported cryptographic currencies (CBDCs), which stated that they are not  the response to the cashless economy.

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