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ECB Response to European Parliament on DLT and Virtual Currency Scheme Risks

On July 17, 2017 the European Central Bank (ECB) wrote a letter to the European Parliament discussing the impact of distributed ledger technology (DLT), the technology underpinning decentralised virtual currency schemes (VCS), on its tasks in relation to monetary policy, financial stability and prudential supervision.

Following reports on VCS published in 2012 and 2015, the analysis shows that DLTs and VCS "do not pose a threat to financial stability owing to their limited connection to the real economy, the low volumes issued and traded, and the lack of wide user acceptance. The reports also conclude that they do not pose a risk to price stability, provided that their issuance volumes continue to be stable and their usage low."

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