Former ECB Director-General Hints That Bitcoin is an Illusion

Bitcoin appeared at a time when global economy showed its weakness. While the enthusiasts of the world’s most popular digital currency are sure that Bitcoin is a solution to challenges of the financial sector, its critics, such as ex-Director-General of the European Central Bank (ECB) believe that it is a scam or in this case, illusion.

Interestingly, the ECB has never been a big supporter of Bitcoin and cryptocurrencies in general, despite being interested in central bank digital currencies. In a recent panel discussion at Vienna, Aurel Schubert, the former Director-General of the ECB, maintained:

“May be sooner or later, Bitcoin will be one of those objects on display in the Museum of Illusions. I am sure central banks and also the fiat money, I am convinced it will not be in an exhibition any time soon in the Museum of Illusions.”

While acknowledging that present-day market begs for digital changes in sectors disrupted by the inefficiencies of the legacy systems, Schubert stated:

“But it is clear that the digital market wants and demands some quick, safe, cross-border payment solution available 24/7, and smooth exchanges. We have a current local payment solution systems, however, they are not global. They are also compartmentalized, and maybe they are not fit for the globalized economy.”

However, he strongly believes that Bitcoin is not a solution to the problem and not a currency as well. The ex-Director-General further added that the focus in the Bitcoin market was on making capital gains and that it “sounds like a Ponzi scheme”.

Schubert also doubted Bitcoin being a medium of exchange and the expensive transaction fees on Bitcoin blockchain.

The former executive’s statements are not surprising, since the cryptocurrency industry has been criticized by central bankers around the world. Some time ago, former European Central Bank President Jean-Claude Trichet bashed Bitcoin during a panel discussion at Beijing-based media group Caixin’s annual conference.