EU Central Bank’s “Crypto Assets: Developments and Perspectives” Report Remains Critical of Bitcoin
The Top digital currency by market cap, Bitcoin (BTC), marked its 10th year anniversary this year. BTC which took the world by surprise back in 2017 when it reached its all-time high of about $20,000 has neither been rejected nor totally accepted by financial institutions and governments, although a few regulatory agencies have started encouraging crypto-friendly innovations and development, while some still shove off any digital currency discussions.
The European Central Bank recently released a report ‘Crypto assets: developments and perspectives' where Bitcoin was discussed. On Twitter they said :
“Crypto-assets like #bitcoin are increasingly popular but are volatile and speculative, and they are not currencies. New technologies like #blockchain enabled their emergence”
Relatively New And Volatile
The European Central Bank in a blog post described BTC and other crypto assets as “relatively recent phenomenon”. The post also said that the increase in popularity of cryptocurrencies over the past decade has “resulted in a growing number of trading platforms and an expanding variety of new crypto-assets.” The report pointed out that digital currencies were “highly volatile” and that their
“combined value is small relative to the value of euro banknotes in circulation or other asset classes.”
The post stated:
“As a comparison, total issuance of electronic money in the euro area (excluding the Eurosystem) reached more than €9 billion in May 2018. In 2017 commercial banks accounted for approximately 70% of this electronic money issuance.”
Cryptocurrency Not “Currency”
In addition, the Bank stated that digital currencies were not real “currencies” and that they did not have a “legal status” nor a “distinct legal framework”.
“The absence of any specific institution, such as a central bank, protecting the value of crypto-assets makes them unsuitable for use as a form of money. Moreover, the pronounced volatility of crypto-assets and their limited acceptance by merchants discourages their use as a store of value or means of payment…”
A Twitter user, Javierbitcoin, tweeted
“Hahahhaa your monopoly is coming to an end… How do you feel knowing that you are going to have to work? Creating money out of thin air will end soon. Elite is becoming part of the mass.”
Another Twitter user Paola Agazzone, tweeted
“Blockchain technology exists because Bitcoin exists. It can not be separated. Moreover bitcoin (especially BCH) is a peer to peer electronic *cash* system. It’s volatile but who cares? On average the value increases because it can’t be printed out of thin air.”