European Parliament, Bank of Finland Release Conflicting Analyses on Cryptocurrency

Two reports released this week by the European Parliament and the Bank of Finland have demonstrated the drastically different views of cryptocurrencies held by the European Union as a whole and by some of its member nations. The report issued by the European Parliament took a more optimistic view of the cryptocurrency phenomenon, while the report released by the Bank of Finland took the form of a scathing attack on cryptocurrencies across the board. The report commissioned by the European Parliament took a generally balanced view of cryptocurrencies, exploring both their strengths and weaknesses. Although the report noted that cryptocurrencies are difficult to apply normal regulations to, it did identify their safe and fast peer-to-peer networks as a major strong point. This report also criticized noted cryptocurrency skeptic Robert Shiller, a Nobel laureate economist best known for developing the concept of the cyclically adjusted price-to-earnings ratio for stock analysis. Shiller's views on cryptocurrencies incline to the school of thought that they will likely fail before gaining widespread adoption.

By sharp contrast, the report issued by the Bank of Finland suggested that cryptocurrencies were devoid of value altogether, labeling them as a "fallacy." This report dismissed decentralized currencies as representing no hard value and effectively being imaginary assets. The Finnish report also discussed the possibility of digital currencies issued by a central bank, but dismissed it as a system that would essentially turn central banks into consumer banking institutions. The frequent use of cryptocurrencies in criminal activity was also mentioned in the report to lend further weight to the argument that Finland should reject the digital currency phenomenon. These two reports illustrate in very clear terms the different views that various national and international entities are taking of the new realities created by Bitcoin and other cryptocurrencies. As cryptocurrencies continue to gain more ground in the global financial sphere, nations will increasingly be pushed to decide on their own policies toward these innovative instruments.