The latest report published by the ECB indicates that they will start using on-chain data to monitor European users in the crypto market. The report called “ Understanding the crypto-asset phenomenon, its risks and measurement issues” and prepared by Maria Teresa Chimienti, Urszula Kochanska and Andrea Pinna, describe the system and methodology that will be used by the ECB to measure crypto transactions and risks in the industry.
In the introduction, the ECB stated the following:
“The ECB has been analysing the crypto-asset phenomenon with a view to identifying and monitoring potential implications for monetary policy and the risks crypto-assets may pose to the smooth functioning of market infrastructures and payments, as well as for the stability of the financial system”
The report came after the IRS started to modify the already existing tax framework to enhance the monitoring of digital assets. The ECB system may be in action really soon, however, it still need to overcome major challenges and gaps in information. The gap comes from financial institutions around Europe who has not adapted crypto monitoring protocols in their structures.
According to the report, the future holds interesting things as the ECB “plans to go into more granular detail for its analyses of crypto assets, as well as continue to work on indicators and data by dealing with the complexity and growing challenges encountered in analysing on-chain and layered protocol transactions.”
Words coming from the biggest monetary body in Europe are encouraging as they are creating a basement for the central banking community to refine its tools. Adoption is here, and The European Central Bank (ECB) knows it.
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