BAKU, Azerbaijan, March 5. Bitcoin is not appropriate as a means of payment or investment, Trend reports, referring to the European Central Bank (ECB) blog.
The statement was made by Deputy Head of Division Market Infrastructure Management at ECB Ulrich Bindseil and advisor to the department Jürgen Schaaf.
Such claims were made after the US Securities and Exchange Commission (SEC) approved the launch of the first ETFs investing directly in cryptocurrency in January.
On the ECB blog, Bindseil and Schaaf highlight that bitcoin enthusiasts view official recognition as a validation of the cryptocurrency's investment safety, citing the previous surge as a sign of its success. Despite this perspective, the ECB representatives dissent from both assertions, contending once more that the intrinsic value of Bitcoin remains at zero.
Their argument extends to El Salvador, where Bitcoin holds legal tender status and citizens have received complimentary bitcoins valued at $30. Despite this, they underscore that widespread usage as legal tender has not materialized. They highlight the persistently sluggish, inconvenient, and costly nature of Bitcoin transactions, emphasizing its near absence in everyday use outside the "darknet," an obscured online network associated with illicit activities.
Bindseil and Schaaf point out that Bitcoin lacks the cash flow characteristic of real estate, the dividend aspect found in stocks, and the utility for productive purposes seen in commodities, making it distinct for investors.
ECB officials are concerned about the potential reappearance of the bitcoin market cycle, which is marked by vigorous rise followed by a bubble burst, and see it as a dismal prospect. They emphasize the enormous indirect repercussions, including as environmental damage caused by the significant energy consumption required to create bitcoin, as well as the resultant income redistribution that disadvantages the less knowledgeable.