Legislators and central bankers are discussing whether they should intervene to regulate cryptocurrencies, as China already has done, European Central Bank governing council member Ewald Nowotny said on Thursday, Reuters reported.
“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,” said Nowotny, who is also the president of the National Bank of Austria.
Nowotny added, however, that cryptocurrencies such as Bitcoin (EXANTE: Bitcoin) pose no risk 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.
“It is like buying shares on the bourse ... people investing in this product can suffer losses and if that happens, they simply have to accept it,” he said.
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.