- ECB officials called BTC “inappropriate,” saying it isn’t suitable for payments or investments.
- The apex financial institution argued that Bitcoin is purely speculative and has no cash flow.
- According to the blog post, crypto regulation is a fallacy, and Bitcoin isn’t a worthy target.
- In addition, ECB officials cited the slow processing of BTC transactions as a concern.
- Although the European Central Bank opposes digital assets, the European Union supports regulation.
In a recent blog post titled ‘Bitcoin’s Last Stand,’ officials from the Europe Central Bank (ECB) registered a strong stance against BTC.
They labeled BTC as “inappropriate,” saying it’s not fit as a means of payment and investment. Backing this position, the post cited the recent crisis in the cryptocurrency market due to the demise of FTX.
The official further described BTC’s fall from its all-time high of $69,000 to its recent benchmark of $20,000 as an “artificially induced last gasp before irrelevance” and maintained that it would never recover from its recent decline.
The officials of the apex financial institution argued that the market valuation of Bitcoin is based solely on speculation. According to them, Bitcoin doesn’t offer cash flow like real-life assets.
Further, the blog post described the existing regulatory framework for cryptocurrency as a child of fallacy. In their argument, they said BTC isn’t worthy of regulation.
“Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimized,” the officials stated. “Similarly, the financial industry should be wary of the long-term damage of promoting Bitcoin investments.” Moreover, the ECB officials cited how the slow processing of BTC transactions made the token a questionable means of payment. Backing that point, they described BTC transactions as cumbersome, slow, and expensive.
European Council Stand on Cryptocurrency
On October 5, the European Council approved the comprehensive Markets in Crypto-Assets (MiCA).
For the cryptocurrency sphere, the development marks a significant milestone taken by the European authorities. The bill will ensure that the industry must work to protect investors and will stop the usage of crypto for illicit activities.
While the ECB still opposes the digital assets sector, the European Union has welcomed the need to regulate the industry. As a result, the industry appears to have gained a strong foothold within the EU.
On the Flipside
- Bitcoin community members responded by pushing back immediately against the recent move by ECB officials. For instance, venture capitalist Mike Dudas pointed out that euro values have fallen by 20% since 2021, making the currency irrelevant.
Why You Should Care
The ECB’s words have significance because the body supervises eurozone banks and has a say on EU financial regulations. It will therefore be interesting to see how things play out in the battered market for cryptocurrencies in the EU.
Learn more about crypto policies in Europe:
Italy Proposes a 26% Tax on Capital Gains from Digital Assets: 2023 Budget
Israel’s Chief Economist Wants Policymakers to Initiate Policies Capable of Fostering Crypto Adoption