EU Parliament Report: How Banks Can Overcome Bitcoin

Published on 24 Jul. 2018
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A recent report, published by the Department of Politics of the EU Parliament under the headline “Competition Issues in the Area of FinTech” warns about some problems that Bitcoin has yet to face. In particular, it says that the cryptocurrencies launched by the Central Bank can supersede Bitcoin.

EU Parliament Has Worked Out the Plan Against Bitcoin

The announcement from the ECON Committee states that the digital currencies launched by the central banks will have a significant influence on the current cryptocurrency market.

It states:

The existence of approved cryptocurrencies launched by the banks and central banks will change the current level of competition in the cryptocurrency market by increasing the number of competitors.

More than that, the report differentiates the private digital currencies such as Bitcoin from those launched by the central banks, opposing them to one another.

According to the research, the central and commercial banks can sufficiently reduce the price of Bitcoin and other cryptocurrencies blocking the users of exchanges to the bank accounts or by denying them in bank services.

Besides this, the report states that the market capacity of the banks in the traditional bank services can be used to limit the competition on the cryptocurrency market with the preventive purchasing or strict pricing schemes.

The report also differentiates two types of competition problems: the ones that happen between the various cryptocurrencies and are the part of “inter-cryptocurrency” market, and the ones between service providers such as exchanges and wallets, called “inner-cryptocurrency” market.

Talking about the inter-cryptocurrency market, the report conludes that the big networks can become a significant obstacle for the new market members who want to enter the field. It can cause potential plots of the members of hypothetical cartels.

The issues of the inner-cryptocurrency market are more or less similar. Service providers can create practices that can critically mingle the access to the market.

According to the research, the further confirmation of this statement is the fact that 79% of all Bitcoin mining is controlled by five mining pools.

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