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A Central Bank of Ireland official is raising questions about the potential impact of bitcoin on the traditional finance sector, Irish news outlet RTÉ reports.
Gareth Murphy, Director of Markets Supervision at the Central Bank, made the comments during the Bitfin 2014 conference taking place in Dublin Thursday, noting that currencies that compete with the Irish legal tender are capable of creating challenges: specifically, the “central banks’ ability to influence the price of credit for the whole economy.”
The official reported added that the country’s finances could be threatened if an increasing amount of transactions are carried out via these non-legal tender currencies, such as bitcoin, as there is the possibility of easily avoiding taxation.
Murphy included in his statements that a decrease in consumer confidence in traditional finance (which is often a talking point highlighted when bitcoin is spoken about) could cause a drop in economic activity, though the statement seems to be taking things to the extreme.
In other words: bitcoin is a challenge because we have no control over it.
Of course, that’s the point, but you probably would have expected a banker to say such a thing anyway.
Still, Murphy says that those who turn to alternative currencies aren’t able to enjoy consumer protections available via current means, which refers to bank balances being insured to a certain level if a bank goes belly-up.
Just because digital currency isn’t in the direct control of the Central Bank doesn’t mean they aren’t keeping their eyes on it, however. It would be silly to imagine they weren’t. But according to Murphy, supervising digital currency requires resources, and whether or not the Central Bank will allocate them is unclear.
[textmarker color=”C24000″]Source[/textmarker] RTÉ
