European Central Bank (ECB) officials have categorised Bitcoin (BTC) as unsuitable both as a payment method and as an investment vehicle, in light of the extensive fallout in crypto markets after the failure of FTX.
In a blog article titled ‘Bitcoin’s final stand’ published on Wednesday, November 30, Ulrich Bindseil and Jürgen Schaaf refuted suggestions that the BTC will recover from its current downturn.
According to the two central bankers, Bitcoin’s “conceptual design and technology flaws” make transactions “cumbersome, sluggish, and costly,” making it a “questionable” method of payment. In the spirit of innovation and development, they argued that cryptocurrencies should not be granted formal status.
In addition, the blog was critical of regulators, asserting that the current crypto frameworks were based on fallacies such as the notion that innovation must be supported at any cost. The blog article argued that people should “provide room to creativity at all costs.”
In October, the European Securities and Markets Authority (ESMA) cautioned that the rapid acceptance of cryptocurrencies might impact conventional finance. The European Securities and Markets Authority (ESMA) said that owing to their volatility and lack of regulation, cryptocurrencies pose several threats to financial stability.
As Finbold reported at the end of September, Christine Lagarde, the president of the European Central Bank, has also expressed worry that the rise of cryptocurrencies might threaten the traditional banking system.
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