Cryptocurrency

German Finance Minister Doubts Crypto Can Currently Replace Traditional Currencies

Olaf Scholz, Germany’s Finance Minister, is doubtful for cryptocurrencies to be able to replace the traditional fiat currencies according to the current market, reports Cointelegraph auf Deutsch on September 18.

In Münster, at a citizen dialogue presented at the German-Dutch Army Corps Scholz said that presently he doubts whether the cryptocurrencies have the perspective that is provided by the existing fiat currency model. He further comprehended his view on cryptocurrency by comparing them with the 17th-century tulip fever bubble in the Netherlands. He says that the danger is greatly similar and therefore this time there can be tulip inflation too.

Scholz explained his predictions by saying that it seems impossible looking at it presently. For one, cryptocurrencies need an extensive amount of computer processes which will help in the mass implementation of the crypto. That seems to be the expensive and energy-consuming affair which may not work. But he also says that he would like to see 20-30 years in future when it might be possible to do so.

Scholz further adds that the regulators should closely examine the cryptocurrencies, as it possesses a threat for money laundering, terrorist financing as well as other criminal activities. Moreover, he believes that cryptocurrencies don’t seem to have an “economically significant importance as of today.”

In the last several weeks, the European legislatures seem to have met many times for discussing the role of cryptocurrencies, its concerns as well as remedial ways to solve the threats and problems that associate with virtual currencies and digital assets.

The European Parliament members met on September 4 for discussing the regulations related to Initial Coin Offerings (ICOs). They decided that ICOs are very promising and interesting instruments to raise capital. However, it still requires more regulatory efforts as per the views of many members of the European Parliament legislators.

European Commission Vice-President Valdis Dombrovsksis, at a recent meeting of Economic and Financial Affairs Council in Vienna, claimed that cryptocurrency sought further regulations to approve on a nation-wide platform. However, until that happens, Dombrovsksis believes that “cryptocurrency is here to stay.” He stressed that the European Union would focus on the crypto asset classification development as well as regulatory mapping.

Earlier this meeting commenced the reports from Bruegel insisted the European regulators take measures in adopting the uniform regulation on cryptocurrencies on the platform of European Union. Furthermore, the reports suggested that regulations are for national entities, but the crypto businesses can still opt for “regulatory arbitrage.”

Recently a report from UAE daily outlet stated a statement of Dubai chief police where he said that he believed that cryptocurrencies would soon replace the current fiat traditional currency of the nation. The government of UAE is soon planning on launching their first cryptocurrency to be implemented on a national platform.

The conflicting ideas on the debate of whether cryptocurrencies will replace the fiat currencies possess a new challenge and notion every day. While most of the regulators are skeptical about it, some industry regulators and experts are working to make the change happen.

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