European Central Bank: "Bitcoin loses its relevance" – Bits Media

ECB leaders believe, that bitcoin does not have characteristics, which would allow him to become an integral part of the financial system.

Director for market infrastructure and payments of the European Central Bank Ulrich Binzale (Ulrich Bindseil) and adviser ECB for the development of market infrastructure and payments Jurgen Shaf (Jürgen Schaaf) Published an article, in which Bitcoin was criticized. They claim, that due to its conceptual design and technical disabilities, the first cryptocurrency is unlikely to be used to make everyday payments along with ordinary currencies, since transactions with bitcoin take a lot of time and too expensive.

Binzale and Shaf claim, that BTC is not suitable for investment, since this cryptoactive does not create cash flows and does not bring dividends, It cannot be used to obtain social benefits. It means, that the cost of bitcoin is based exclusively on market manipulations. ECB leaders compared the first cryptocurrency with speculative bubbles, The profit in which depends on the influx of new money. Therefore, large bitcoin investors are interested in maintaining the state of euphoria among new investors, The authors of the article suggested.

Eurobankirs noted, that in recent months, regulatory authorities often talk about supervision of cryptocurrency space and are trying to make appropriate amendments to the legislation. However, these conversations contribute to the wrongly understand cryptocurrencies, count Bingzale and Shaf. They are sure, that the discussions between legislators about the advantages of bitcoin contribute to investments in this cryptoactive and give an impression, that cryptocurrencies are just a different class of assets. Investments of large financial institutions in Bitcoin also create a false impression of the reliability of investments among retail investors. At the same time, regulators only talk about the risks of cryptocurrencies, but they are in no hurry to develop the rules for their regulation, Bingzale and Shaf are indignant.

A joint article says, that the production of bitcoin annually consumes the amount of electricity, comparable to the consumption of the whole Austria. BTC miners generate the same amount of electronic waste, how much is a country like the Netherlands. The authors of the article warned banks, working with bitcoin, About reputation risks, which may arise, If customers suffer serious losses.

In August, the ECB stated, that the only alternative to fiat money can be the state digital currency. In November, ECB President Christine Lagard (Christine Lagarde) reported, that the European Commission is already working on a bill on digital euro.