European Central Bank: No Plans To Add Bitcoin To Reserves, Citing It’s Not A Currency
The EU Central Bank is continuing with its dismissive stance towards Bitcoin and other cryptos. This time around saying that it will not add Bitcoin to its reserves as it does not recognize it as a currency.
The assertion was delivered by a European Central Bank’s official Phillip R. Lane who was engaging followers on Twitter in a conversation dubbed AskECB.
“I’m here to answer your questions for the next 45 minutes. Please use #AskECB to join the conversation,”
Lane wrote on Twitter.
While the questions were generally focused on the euro, Lane responded to a couple of questions regarding cryptocurrencies.
One of the followers asked whether ECB have plans to add Bitcoin to its reserves and the ECB’s executive board member and Chief Economist was quick to respond:
“Bitcoin is not a currency, it rather is an asset and it is very volatile.”
The response is a continuity of the ECB’s negative reaction towards the cryptocurrencies which it has not shied away from pronouncing in other public statements and forums.
Gold Isn't a Currency Either!
Lane’s brief and dismissive reply did not go down well with numerous crypto enthusiasts and worshippers. Mati Greenspan, eToro’s Senior Market Analyst questioned Lane’s response and said,
“Gold isn’t a currency either. What kind of answer is this?!”
While the comment section went berserk with Bitcoin maximalists and non-believers of crypto, another Twitter user asked Lane about regulating Facebook’s new cryptocurrency. When Facebook announced its cryptocurrency Libra, France formed a task force within the Group of seven [G7] nations to understand and examine its problems. It is led by ECB Board member, Benoit Coeure. Lane informed the user about this and said,
“Benoît Cœuré, my colleague on the ECB’s Executive Board, leads the G7 working group on stablecoins. The group will present its initial findings on 17 July #AskECB”
While replying to a question seeking his view on Structured CryptoCurrency Investments – Debt guaranteed securities, offered by Investment banks, linked to CryptoCurrency indices, hedged with cryptocurrency futures, are a credible way to invest in the crypto-payment space, Lane gave a disclaimer of not providing any investment advice, but added,
“By the way, it is a high hurdle for a crypto-asset to satisfy the definition of a currency.”
Even though Banks have been skeptics of cryptocurrency since its inception, with Facebook’s crypto entering the market, ECB has tied its laces and asked regulators to buckle up so as to not allow them to develop in a regulatory void or their financial service activities, because it’s just too dangerous.
Cointelegraph reports that At the beginning of May this year, ECB produced a report on the implications of crypto assets on financial stability, monetary policy and payments and market infrastructures in which it concluded that the whole phenomenon had little to no impact on the conventional financial economy.
In another instance, the EU Central Bank has rebuffed the idea of having its own digital currency in response to countries exploring this option.
Will time prove the European Central Banks wrong after cryptos become mainstream? Share with us in the comments section.