In their ‘Chart of the Day’ post Bloomberg notes that “An increase in the value of bitcoin, the world’s largest online currency, may fuel concerns that virtual money could undermine the role of central banks.”
“Greater demand for virtual currencies could have a negative impact on the reputation of central banks, according to a report published by the European Central Bank in October last year. Since the report was released, bitcoin has risen more than 55 percent against the dollar and use of the currency has surged.”
“Bitpay Inc., a bitcoin payment processing company that recently raised $510,000 in an investment round, this month announced that the number of companies using its services has increased almost 50 percent to more than 2,000 since November, when blog management firm WordPress.com said it would accept the digital currency.”
“Virtual currencies ‘could have a negative impact on the reputation of central banks’ if their use grows considerably, the Frankfurt-based ECB said in its research paper. ‘This risk should be considered when assessing the overall risk situation of central banks.’ “
Read the post in its entirety here.
Read my review of the ECB’s report on virtual currencies here.