ECB studying digital currency risks for banks: Draghi
FRANKFURT: Mario Draghi said the European Central Bank's supervision arm is studying the risks that digital currencies may pose to banks' balance sheets. "Right now digital currencies are not subject to a specific supervisory approach," the ECB president said responding to lawmakers' questions at the European Parliament on Monday. "Work is underway in the SSM to identify potential prudential risks that these digital assets could pose to supervised institutions."
Draghi stressed that bitcoin and other cryptocurrencies are "very risky assets" that exist in an "unregulated space." Bitcoin fell about 17 percent against the dollar on Monday and has lost about half its value since the start of the year. "We are not observing a systemically relevant holding of digital currencies by supervised institutions - - by banks in other words. Actually the credit institutions established in the European Union are showing limited appetite for digital currencies, like Bitcoin, notwithstanding the high level of public interest." Still, the ECB chief said the bank needed to keep an eye on cryptocurrencies as new risks arise, such as Bitcoin futures contracts on U.S. exchanges. "Therefore we certainly look at that," he said.