Ex-ECB Chief is “Strongly Against Bitcoin,” Says Cryptocurrencies are “Not Real”
- Trichet sees SDRs by IMF as an alternative monetary tool instead of central bank digital currency
- He is also “very much against” against Facebook’s crypto project Libra
Jean-Claude Trichet, the former president of the European Central Bank is not a fan of cryptocurrencies and is doubtful that they could ever become the future of money.
“I am strongly against bitcoin, and I think we are a little complacent,” said Trichet during a panel discussion at Caixin’s 10th annual conference in Beijing on Sunday.
“The cryptocurrency itself is not real, with the characteristics that a currency must have.”
Trichet who led the ECB from 2003 to 2011 further said buying a cryptocurrency is just “pure speculation,” adding,
“Even if [the cryptocurrency] is supposed to be based on underlying assets, I am observing a lot of speculation. It is not healthy.”
Trichet who served as the governor of the Bank of France for a decade is not alone in sharing these concerns. In Sept. ECB board member Benoit Soeure went as far as to say that cryptocurrencies could “challenge the supremacy of the US dollar.”
As for Libra, the 76-year-old French economist said he is “very much against” Facebook’s cryptocurrency project. The social media giant has been facing scrutiny from the regulators worldwide that led firms like MasterCard, Visa, and Paypal to pull out support from Libra Association.
However, while other officials like Bank of England’s Mark Carney have proposed a digital reserve currency, Trichet prefers Special Drawing Rights created by IMF whose value is pegged to the fiat currencies viz. the US dollar, the euro, the yen, the pound sterling, and the renminbi.
“I have great doubts of keeping control of monetary value in [the cryptocurrency] domain,” said Trichet. “In the so-called new stable international currencies … the SDR would be the right basket.”
According to Trichet, the world may be moving away from physical notes and coins but that doesn't mean the right direction is towards cryptocurrencies.
“We are already in a domain that has much less physical currency. Whether we are in a domain where that will be replaced with crypto? I have doubts there,” he said.