Bitcoin price stability is viewed by its supporters as a lull before renewed gains, but more likely an ‘artificially induced last breath’ on the road to ultimate obsolescence. This view высказали specialists ECB.
Ulrich Binzdaïl, the ECB’s Director General for Market Infrastructure and Payments, and the institution’s adviser Jürgen Shaff noted that Bitcoin’s future collapse was fully forecast even before the FTX collapse.
Experts stressed that the first cryptocurrency proved unsound as a means of payment.
“Transactions are bulky, slow and expensive. Bitcoin has never been used in any meaningful way for legitimate real-world transactions,” the article’s authors said.
The market valuation of the cryptocurrency rests solely on speculation, the experts say. At the same time, Bitcoin is not suitable for investment, they believe.
“It does not generate cash flow (like real estate) or dividends (like stocks), cannot be used in production (like a commodity) or provide social benefits (like gold),” Binzdail and Shaff say.
They noted that cryptocurrency regulation is wrongly perceived as an endorsement of them as another asset class.
According to the experts, rulemaking and its implementation lag badly and rely on incorrect assumptions. Moreover, in different jurisdictions the process proceeds at different speeds. If the EU has already developed a comprehensive MiCA bill for digital assets, the US lawmakers have yet to reach a consensus, the authors note.
Binzdail and Shaff believe that faith in Bitcoin’s innovative potential is entirely misplaced. In their view, blockchain “has not yet created significant social value.”
“Because Bitcoin does not fit as a payment system or as an investment, it should not be treated as either for regulatory purposes and, consequently, should not be legalized,” they said.
ECB officials noted that proposed regulation “lured the traditional financial industry into making access to cryptocurrency easier for clients.” However, they are confident that participants in the crypto space, including banks and asset managers, should fear long-term reputational damage from Bitcoin investments, despite the possibility of short-term gains.
As noted earlier, Belgium’s Financial Services and Markets Authority said that Bitcoin and Ethereum do not meet the criteria of securities, and therefore do not fall under financial regulation.
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