ECB looking at risk to banks from digital currencies

STRASBOURG (Reuters) - The European Central Bank is working to identify any financial stability risk from digital currencies but banks so far seem to be showing little appetite to invest in Bitcoin, ECB President Mario Draghi said on Monday.

"We are not observing a systematically relevant holding of digital currencies by supervised institutions," Draghi told the European Parliament in Strasbourg. "Actually, credit institutions ... are showing limited appetite for digital currencies, like Bitcoin."

"We should understand that Bitcoin and other digital currencies are in the unregulated space and should be regarded as very risky assets," Draghi told lawmakers. "Banks should measure the risk of any holding of digital currencies in their portfolio accordingly."

He added that the ECB's supervisory arm is now working to identify any potential prudential risk posed by digital assets.

(Reporting by Robert-Jan Bartunek; Writing by Balazs Koranyi; Editing by Francesco Canepa)

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