Former ECB Chief Claims Bitcoin is Not Real

Former ECB Chief said that Bitcoin is not real. It does not have the qualities of a real currency. He is skeptical about the future of cryptocurrencies, as he does not expect them to replace fiat currencies.

11 November 2019, AtoZMarkets Former ECB President Jean-Claude Trichet, during his speech at the 10th annual conference of Caixin, Sunday in Beijing, made skeptical remarks on bitcoin and cryptocurrencies in general. According to the SCMP, Mr. Trichet stated that the purchase or any other cryptocurrency is pure speculation.

ECB is against to Bitcoin

During a discussion, Mr. Trichet said he was strongly opposed to bitcoin. The cryptocurrency itself is not real, with the characteristics that a currency must-have, he added. Central banks have criticized the decentralized nature of cryptocurrencies around the world. Earlier, Benoit Soeure, a member of the ECB’s board of directors, echoed a similar view when he said that cryptocurrency could challenge the supremacy of the US dollar.

The comments of the former ECB President on bitcoin and other cryptocurrencies have not been surprising. As several central banks have raised concerns about cryptocurrency and bitcoin and the threat they pose to monetary sovereignty. Many countries plan to issue their own central bank-backed digital currencies (CBDCs) with competing with decentralized cryptocurrencies.

Read More: What are Blockchain’s Issues and Limitations?

ECB is also against Facebook’s Libra

Mr. Trichet added that he is also not a fan of Facebook’s Libra stablecoin proposal and noted that he prefers, unsurprisingly, the Special Drawing Rights (SDRs) issued by the International Monetary Fund.

Like the plans of the Libra, the SDRs are backed by a basket of currencies. That is including the US dollar, the euro, the pound, the renminbi and the yen. He explained that he has considerable doubts about the control of the monetary value in the cryptocurrency domain. In so-called new stable international currencies, the SDR would be the right basket. Mr. Trichet also said that if the world leaves behind the banknotes and coins, cryptocurrencies could not be the way to go.

As AtoZMarkets reported in September, Facebook’s Libra Coin now worries members of the Central European Council for mass adjustment and a threat to central banks. However, the stablecoin, like Libra, has a massive potential for instant mass matching. Further, it has to pass a severe regulatory test from the regulators. Benoit Coeure, a member of the ECB’s board of directors, believes that stable coins like Facebook’s Libra offer risks to public policy priorities.

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