GETTY Yves Merschsaid bitcoin and other cryptocurrencies pose a risk to the established financial order

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Yves Mersch, a member of the executive committee of the European Central Bank (ECB) said bitcoin and similar unregulated cryptocurrencies pose a real risk to the established financial order. In an interview with the German newspaper Boersen Zeitung, Mersch warned the entirely speculative nature of bitcoin’s value was a ‘cause for concern.’ Mersch also warned against banks investing in cryptocurrency.

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When financial market infrastructures such as stock exchanges enter this business, there is a risk to the financial stability Yves Mersch

He said: "When financial market infrastructures such as stock exchanges enter this business, there is a risk to the financial stability." But he indicated that some process of ‘normalisation’ to embrace bitcoin should be undertaken – and sooner rather than later – but that it should be ‘careful and gradual’. In addition, Mersch was concerned by the fact that negative interest rates can have negative effects and erode the savings culture. "Can you imagine that a whole generation grows without knowing what it means to earn interest for your money?" said the Luxembourg banker.

GETTY Mersch warned against banks investing in cryptocurrency