The ECB still considers bitcoin unsuitable for payments and investments

According to Ulrich Bindsail, Director General of the Department of Market Infrastructure and Payments at the European Central Bank (ECB) and Jurgen Schaaf, adviser to this department, bitcoin is not suitable either as a means of payment or as an investment. 

These statements were made after approval in January by the Securities and Exchange Commission (SEC) The USA is the first ETF investing directly in bitcoin. 

«For bitcoin supporters, its official recognition testifies to the safety of investments, and the previous growth is proof of the triumph of this cryptocurrency,» Bindzail and Schaaf noted in their blog on the ECB website. «However, we disagree with none of these statements and confirm that the fair value of bitcoin remains zero.»

In their opinion, even in El Salvador, where bitcoin is recognized as a legal means of payment and where citizens are given free bitcoins in the amount of $30, it has not been widely used in this capacity. Bitcoin transactions remain slow, inconvenient and expensive, and are rarely conducted outside the darknet used for criminal activity.

From the point of view of investors, bitcoin does not bring cash flow (like real estate), dividends (like stocks) and cannot be productively used (like commodities), ECB representatives added.

They also stressed that strong growth could be followed by an explosion of a «bubble», and this is a terrible prospect. The indirect consequences will be huge, including damage to nature due to the high energy consumption required to create bitcoins, and the ultimate redistribution of wealth to the detriment of less informed members of society.

It is worth noting that Bindzail and Schaaf have already expressed similar criticism of bitcoin in November 2022. Over the past year, the cryptocurrency has more than doubled.