“The Evil Spawn of the Financial Crisis”

European Central Bank executive board member Benoît Cœuré had some harsh words about Bitcoin at the Economics of Payments IX conference in Basel:

“Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about UK banks’ bailout. In more ways than one, Bitcoin is the evil spawn of the financial crisis.”

He continued to say that while he believes Bitcoin is a clever idea, that is not enough to make it a good idea. Cœuré echoed a stance expressed by Agustin Carstens, who said Bitcoin was “a combination of a bubble, a Ponzi scheme and an environmental disaster”.

Cœuré previously expressed his stance on cryptocurrency in an opinion piece in March, where he said that cryptocurrencies are unfit for use as money, but said that central bank digital currencies (CBDCs) could be a viable idea. He did admit, however, that Bitcoin has successfully brought attention to some of the banking system’s flaws:

“Despite its many faults, bitcoin has put the spotlight on an old failing of our current system: cross-border retail payments.”

It is no surprise that central bank representatives are opposing Bitcoin, and the antagonism goes both ways – hardcore Bitcoin advocates are not exactly fans of central banks, either.

Central Bank Digital Currencies

According to Cœuré, a CPMI (Committee on Payments and Market Infrastructures) surveyed around 80 central banks, and 69% of them said they are either already conducting or are planning to conduct work related to CBDCs. He continued to explain that while the area is being explored, there is broad agreement a central bank issued digital currency is unlikely to become a reality in the next 10 years.