ECB officials claimed on Wednesday that Bitcoin is “seldom used for legal transactions” and that its bubble is fueled primarily by speculation, and its recent erosion of value shows it is in an “insignificant position”, with a series of harsh criticisms (although a lack of a strong data process) of the cryptocurrency industry as they urged regulators not to provide legitimacy to digital tokens in the name of innovation.
Ulrich Bindseil and Jürgen Schaaf wrote on the ECB blog: "Bitcoin's value has recently found a stable zone around $20,000, which is the last breath of artificially induced before the path to irrelevant, before FTX goes bankrupt and sends the Bitcoin price well below $16,000. "
European Central Bank officials believe that Bitcoin's conceptual design and "technical flaws" make it "questionable" as a means of payment." Real Bitcoin transactions are cumbersome, slow and expensive. They wrote: "Bitcoin has never been used to largely legitimate real-world transactions."
" It does not generate cash flow (like real estate) or dividend (like stocks), cannot be used productively (like commodities) or provide social benefits (like gold). Therefore, the market valuation of Bitcoin is purely based on speculation," they wrote.
Central Bank officials also said that Bitcoin "repeatedly benefited from the wave of new investors" and "manipulation by individual exchanges or stablecoin suppliers", but these strategies do not provide stable factors.
The remarks of these bankers have aroused criticism from some tech enthusiasts. In a series of tweets, investor and commentator Joel John pointed out that a report by security audit firm Chainalysis concluded that only 0.15% of cryptocurrency transactions are related to criminal activity, compared with 5% for traditional currencies.
"I don't mean that cryptocurrencies have no useful roles, and this field is indeed full of unbridled players, and regulators are an important part of it. But putting more effort into the way the industry reports can help us go further." John wrote: "Biasm is easy, but it won't lead to progress.
Bankers say cryptocurrency companies have funded lobbyists to shake legislators and regulators, but their efforts have proven to be unsuccessful because even lobbying, "a soundbar is needed to have an impact."
"The current regulation of cryptocurrency is partly formed by wrong ideas. The belief that one must leave room for innovation at all costs exists stubbornly. Since Bitcoin is based on a new technology - DLT / blockchain - it will have high transformation potential. First, these technologies have so far created limited value for society—regardless of the expectations for the future. Secondly, using a promising technology is not based on the product value added by the technology , ,” they added.
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