The European Central Bank Argues Against Regulatory Cryptocurrency

Twitter icon  •  Published vor 1 Jahr  •  Nikolas Sargeant

The European Central Bank (ECB) has stated that Bitcoin is on an “artificially induced last gasp before the "road to irrelevance”

The European Central Bank (ECB) has stated that Bitcoin is on an “artificially induced last gasp before the road to irrelevance”, attempting to contend with the necessity to regulate cryptocurrency. The ECB has also criticized the currency sector for allowing the digital currency space to facilitate illegal activity. 

The price of the virtual currency has declined since the start of the year, with the price dropping from just shy of $70,000 at the start of last year to hovering around $16,000 at the time of publishing. The collapse of FTX, one of the biggest cryptocurrency trading platforms in the world, has caused the market to drop in value and brought up many more questions about the value of crypto. 

What Was Said?

A potent blog post from senior ECB members Ulrich Bindseil and Jürgen Schaaf criticized bitcoin for being a hotbed of illegal activity, which puts the legitimacy of any regulatory body or bank associated with crypto in question. While the recent collapse of FTX isn’t related to purely illegal activity, it does sharpen any criticism about the actual value of the digital market. 

The ECB authors stated that stabilisation is likely to be artificial, inferring that market movements are manipulated rather than due to demand. These are many of the comments that have always been made by major financial institutions when approached for comment on the topic of the crypto space. Comments in the blog post included “Big bitcoin investors have the strongest incentives to keep the euphoria going,” going on to say “The manipulations by individual exchanges or stablecoin providers, etc. during the first waves are well documented, but less so the stabilising factors after the supposed bursting of the bubble in spring.”

The concluding statement of the blog post was particularly damning, “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 legitimised,” 

The Industry Has Spoken

Following comments from the ECB staffers, a few big names in the crypto industry stood up to have their say. Investor Eric Voorhees said that an artificially inflated market would be a great line to “set in a beautiful typeface, ornately displayed on heavy matte paper, and hung elegantly upon my wall.”

Venture capitalist Mike Dudas decided to show data to support his response showing the euro’s 20% decline against the dollar since 2021, claiming that the euro is on the “road to irrelevance.”

The comments from the ECB are timely, given that there is a considerable amount of doubt surrounding the crypto industry following a chaotic year. The LunaTerra fiasco and now FTX have wiped out two of the biggest names in the industry, and it’s going to be a real task to bring stability and a sense of confidence back to the market. 

Author

Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.