According to a recent declaration by The European Parliament Committee cryptocurrencies can be used as a substitute for money. This was in response to a long-detailed review on how cryptocurrencies function and its influence on a global scale.
The review began with the EU Parliament Committee giving a description of cryptocurrencies as:
“A digital representation of value, not issued by an e-money institution, credit institution or central bank, which in some situations be used as an alternative form of money.”
Added to which the committee further states that:
“Their value is determined by the law of supply and demand, relying on potential exchanges for other goods or sovereign currencies, and it is not backed by any monetary authority.”
“The determination of their value is based on the law of supply and demand, depending on their potential of exchange for other goods or sovereign currencies, and which is not backed by any monetary authorities.”
According to a detailed investigation of this matter reports state that the committee accepts that cryptocurrencies are problematic at times but also they are creative. The European Union now sees cryptocurrencies as a future form of a monetary system and not a threat.
Additionally, the EU parliament committee further states that:
“The new and emerging technologies make use of all disruptive and innovative applications, among which the outstanding ones are AI, biometrics, the blockchain, RegTech, augmented reality, cloud computing, digital identity, cybersecurity, internet of things (IoT) etc.”
The reports also stated that the committee arrived at a conclusion that central banks can issue their own cryptocurrencies and that the existing scenario of competition that exists in the market by proposing a direct public participation using the central bank’s digital currency will be changed.
Although the European Union has given its acceptance on using cryptocurrencies as another means of monetary exchange, they would yet have to face few issues with the regulation procedures. Majority of the crypto-players operate from foreign soils which do not come under the European Parliament jurisdiction and therefore it becomes difficult to prosecute unethical or illegal business activities.
However, the real weakness is the focus of mining which occurs in non-European countries as it was noticed that only 13% of the total mining activities takes place in Europe. The cryptocurrency market considers mining as one of the most advanced and technology-driven activity and currently, Chinese provinces have the largest sources for mining.