Despite the recent optimism in the cryptocurrency market, officials at the European Central Bank (ECB) remain skeptical, unconvinced by the recent spot Bitcoin exchange-traded fund (ETF) approvals by the United States Securities and Exchange Commission (SEC). They maintain their doubts around Bitcoin’s financial stability and its potential for long-term mainstream adoption.
In a blog post on the ECB’s official site, Ulrich Bindseil, Director General of the ECB’s Market Infrastructure and Payments division, and Jürgen Schaaf, adviser to the division, express their dissent. They argue that the acceptance of Bitcoin spot ETFs in the U.S. doesn’t validate Bitcoin as a safe investment. The driving force behind Bitcoin’s recent rally, they suggest, has little to do with fundamental long-term viability and more to do with speculative hype.
Bindseil and Schaaf hold firm on their assertion that Bitcoin has failed as a decentralized global digital currency, and they question its value as an investment vehicle. They are adamant about Bitcoin lacking tangible benefits; it creates no cash flow or dividends, cannot be leveraged productively, and delivers no societal advantages or inherent worth.
Despite the uptick in Bitcoin prices, prompted by expectations around the ETF approvals, the ECB officials view this as transient—potentially “a flash in the pan”. They warn that any form of speculative bubble is highly risky, and they question the motives behind the alleged “effectiveness of the Bitcoin lobby”.
They conclude by reasserting their regulatory role, underscoring the need for stricter oversight to avert various threats, such as money laundering, cybercrime, financial loss risk for uninformed investors, and considerable environmental damage. They also refute suggestions that introducing a digital euro could induce a widespread banking crisis, insisting that banks are not at risk of losing deposits as long-term refinancing resources.