Speaking during an interview on May 25, Verana Ross warned that with the possibility of increased Bitcoin adoption, the EU must be prepared from a regulatory perspective.
Ross believes that the high returns promised by cryptocurrencies make assets like Bitcoin more appealing.
“With inflation rising, investors will look to find investments which are able to try to compensate for inflation and bring greater returns, which might lead to greater risk taking. That is something we are monitoring very closely,” she said. ‘
Push for unified regulations
The chairwoman proposed a unified European approach to crypto regulations as an improvement over the current framework, which is heavily reliant on national laws. There is an imbalance among regulators, according to Ross.
Currently, the ECB is one of the organisations spearheading the push for crypto regulations. The Terra coin crash, which resulted in significant losses for millions of investors, has once again fueled the debate.
ECB President Christine Lagarde reiterated her opposition to cryptocurrencies, citing their speculative nature.
Crypto market volatility continues
Amidst a focus on crypto regulation, the market has spent most of 2022 in the red, with Bitcoin struggling to stay above the $30,000 mark.
Despite the price drop, the number of crypto holders in Europe has increased, according to an ECB report, with about 10% of Eurozone households owning cryptocurrencies.
The ability of Bitcoin to act as a hedge against inflation is one of the growing appeals of cryptocurrencies. Although the flagship cryptocurrency has struggled in the face of rising inflation, supporters believe it is still on track to become a formidable hedge.
