The latest report released by the European Banking Association (EBA) states that over 500 cryptocurrencies in existence today do not threaten finance. The reason is the extremely small percentage of Bitcoin-payments.


“Bitcoin is used for around 69,000 transactions per day worldwide, compared with a total of 274 million non-cash retail payment transactions per day for the European Union alone”, states the report. But EBA fully acknowledges that in the next one to three years cryptocurrencies and their supporting technology can change the way traditional finance works.

It is not only about the size: the EBA accuses cryptocurrencies of several more flaws, namely lack of transparency, dependency on IT infrastructure, high volatility and lack of stability. All that said, bitcoins and payment software tools alike expose users to investment fraud risks as well as system-related risks, conclude EBA experts.

The new assessment doesn’t show a dramatic change of heart since the first report on cryptocurrencies published in 2012. “In the current situation, 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 and a lack of wide user acceptance”, says the “Virtual currency schemes report” released by the European Central Bank back in October 2012. “Participation in these schemes exposes users to credit, liquidity, operational and legal risks”, reminded the report. At the time, the report was probably the first document that gave EU authorities an ample and highly detailed explanation of what bitcoins were and how they could be used.

Strangely enough, the 2015’s edition lists user anonymity, global reach, speed of settlement and low transaction costs as undeniable advantages that can soon challenge the more traditional payment systems. But there is still good news for the Eurobanking: the bitcoin in particular and cryptocurrencies in general due to a smaller — not to say small — number of transactions do not destabilise the system. Not just yet.

“Apart from possibly being able to speed up processes and reduce their complexity, crypto technology applications in this area can also be integrated with legacy IT, legal frameworks and existing assets (currencies, stocks, bonds, etc)”, say EBA analysts. Blockchain technology with its public ledgers might be integrated within the existing — aka traditional — financial system in the next one to three years, the recent report claims.


Tatiana Ilyina