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European Central Bank publishes paper on private currencies, cites Austrian economists
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...European Central Bank (ECB) released its in-depth report on Bitcoin and virtual currencies. The paper titled “The Relevance of Virtual Currency Schemes for Central Bankers,” which is the first central bank study to look at the emergence of Bitcoin, a decentralized digital currency that is the most widely used virtual currency....
...“Virtual currency schemes do not pose a risk to price stability, provided that money creation continues to stay a low level,” the report stated. “[Virtual currency schemes] tend to be inherently unstable, but cannot jeopardise financial stability, owing to their limited connection with the real economy, their low volume traded and a lack of wide user acceptance.”...
...However, virtual currencies could pose a threat to the “real financial system,” the report authors explained. The report cited the case between China and Q-coin and warned that the success of virtual currencies could have a significant impact on a country’s money supply....
...Companies, including American Express and Visa, are trying to get into the market as well...
...“The theoretical roots of Bitcoin can be found in the Austrian School of economics and its criticism of the current fiat system and the interventions undertaken by governments and other agencies, which, in their view, result in exacerbated business cycles and massive inflation,” the report explained....
...“Virtual currency schemes do not pose a risk to price stability, provided that money creation continues to stay a low level,” the report stated. “[Virtual currency schemes] tend to be inherently unstable, but cannot jeopardise financial stability, owing to their limited connection with the real economy, their low volume traded and a lack of wide user acceptance.”...
...However, virtual currencies could pose a threat to the “real financial system,” the report authors explained. The report cited the case between China and Q-coin and warned that the success of virtual currencies could have a significant impact on a country’s money supply....
...Companies, including American Express and Visa, are trying to get into the market as well...
...“The theoretical roots of Bitcoin can be found in the Austrian School of economics and its criticism of the current fiat system and the interventions undertaken by governments and other agencies, which, in their view, result in exacerbated business cycles and massive inflation,” the report explained....
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Full article can be found here: http://economiccollapsenews.com/2012/11/05/european-central-bank-publishes-paper-on-private-currencies-cites-austrian-economists/