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The European Central Bank (ECB) has reiterated its opposing stance towards the crypto sector, despite the market’s optimism. The institution is not changing its position even after the United States Securities and Exchange Commission (SEC) approved the latest Bitcoin spot exchange-traded funds (ETFs).
ECB Advisor Comments on Bitcoin ETF
On February 22, Ulrich Bindseil, Director General of Market Infrastructure and Payments at the ECB, and Jürgen Schaaf, an advisor in the same department, published a post on the bank’s official blog. The blog post addressed the topic of the spot Bitcoin process in the US. The authors disagree with the claim that the approval of Bitcoin ETFs in the US confirms the safety of Bitcoin investments and the unstoppable victory of the previous rally. The bankers assert that the fair value of Bitcoin is still zero:
“A renewed boom or bust cycle for Bitcoin is a terrible prospect for society. The secondary damage will be substantial, including environmental harm and the ultimate redistribution of wealth against the less sophisticated.”
Noteworthy Statements on Bitcoin
Bindseil and Schaaf refer to their 2022 article published on the same blog site, arguing that Bitcoin has failed to fulfill its promise as a global decentralized cryptocurrency. According to them, Bitcoin is not suitable as an investment because it does not generate any cash flow or dividends, cannot be used efficiently, and offers no social benefit or subjective appreciation based on superior abilities. ECB executives agree that the expectation of spot ETF approval has boosted Bitcoin’s price but believe it could be a flash in the pan:
“There is no proof of value in a speculative bubble. Instead, the reinflation of the speculative bubble demonstrates the effectiveness of the Bitcoin lobby.”
The text concludes that regulators’ work to control Bitcoin is not yet finished. Authorities must remain vigilant and protect society from money laundering, cybercrimes, financial losses for the less educated, and extensive environmental damage.
In another column on February 19, ECB executives including board member Piero Cipollone presented arguments against claims that the introduction of the digital euro could lead to an acute banking crisis across the economy and that banks could lose their deposits as a long-term refinancing source.
