A board member of the European Central Bank has said that it’s wrong to describe Bitcoin as a currency — arguing that “it does not fulfil the basic properties of money.”
Isabel Schnabel dismissed the cryptocurrency as a “speculative asset without any recognizable fundamental value” — and said it is subject to massive price swings.
When it was argued that currencies such as the euro don’t have intrinsic value either, and are simply based on trust, she replied:
“The euro is backed by the ECB, which is highly trusted. And it is legal tender. Nobody can refuse to accept euro. Bitcoin is a different matter.”
Schnabel also expressed fears that trust in cryptocurrencies could “rapidly evaporate” because it is a fragile system — and warned this could cause disruption in financial markets.
She added that “nothing has been decided yet” when it comes to the digital euro, and warned “a great deal of preparatory work needs to be done” before any project commences.
Earlier this week, Ark Invest — the company owned by the renowned stockpicker Cathie Wood — hit out at central bankers who have criticized Bitcoin for being inefficient and volatile. One of its analysts, Yassine Elmandjra, told The Times:
“I really think that it’s just outdated arguments as a function of their complete lack of education, which is a function of just their lack of interest in learning about this.”
Elmandjra added that Bitcoin’s massive price swings and inherent volatility are to be expected because of how its monetary policy is independent.