The European Central Bank (ECB) has reaffirmed its negative stance on cryptocurrencies despite recent optimism in the market. The institution remains skeptical of the recent approvals of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC).
Ulrich Bindseil, the Director General of the ECB’s Market Infrastructure and Payments division, along with Jürgen Schaaf, an adviser to the same division, authored a blog post on the ECB’s official website on Feb. 22. The headline of the post, “ETF approval for Bitcoin – the naked emperor’s new clothes,” reflects their dissenting opinion.
Bindseil and Schaaf argue that despite ETF approvals in the U.S., Bitcoin’s fair value remains zero. They express concern over the potential societal and environmental impacts of Bitcoin’s boom-bust cycles, emphasizing the redistribution of wealth at the expense of less sophisticated individuals.
Referencing a previous post from 2022, the ECB executives assert that Bitcoin has failed to fulfill its original promise as a global decentralized digital currency. They argue that Bitcoin lacks intrinsic value, cannot be used productively, and offers no social benefit or appreciation based on outstanding abilities.
While acknowledging that ETF approvals contributed to Bitcoin’s price increase, Bindseil and Schaaf warn against viewing it as proof of Bitcoin’s legitimacy. They characterize the rally as speculative and caution against the influence of the Bitcoin lobby.
The post concludes with a call for continued vigilance from authorities to safeguard against money laundering, cybercrime, financial losses for less educated individuals, and environmental damage associated with cryptocurrencies.
In a separate column on Feb. 19, ECB executives, including board member Piero Cipollone, addressed concerns about the potential impact of introducing a digital euro. They refuted claims that it could lead to an economy-wide banking crisis and asserted that banks would not risk losing deposits as a long-term source of refinancing.
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