The Eurosystem’s monetary policy has only a relatively minor impact on the prices of Bitcoin and other crypto tokens. This is the conclusion reached by Bundesbank experts in the September edition of the Monthly Report, which states that “monetary policy impulses explain only a fraction of the volatile price developments”. At first glance, the high rates of growth seen by crypto tokens appear to be attributable to other factors.

“The recovery of the German economy, which began in spring, continued at a faster pace in the third quarter of 2021,” the Bundesbank writes in its Monthly Report. Particularly strong growth was reported for private consumption and services. Supply-side constraints persisted in industry, however, so that output continued to lag considerably behind strong demand.

The performance of German credit institutions was encumbered last year by the effects of the coronavirus pandemic. Virtually all of the categories of banks recorded either stagnating or receding results for the financial year before tax compared with 2019, the Bundesbank writes in its current Monthly Report. It notes that the surge in risk provisioning in credit business in particular and the ensuing deterioration in results from the valuation of assets were responsible for this.

Introducing central bank digital currency (CBDC) is not an end in itself, believes Jens Weidmann. Rather, a digital euro needs to provide a clear value added to the citizens of the euro area. “CBDCs should only be issued if the perceived benefits outweigh any potential drawbacks or risks,” the Bundesbank President said in a speech at a virtual conference.