FameEX Hot Topics | ECB Remains Skeptical About ETF Approval in the US, Continues to Disapprove of Bitcoin

The European Central Bank (ECB) continues to express its skepticism towards cryptocurrencies, particularly in light of the recent approval of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC). On February 22nd, Ulrich Bindseil, Director General of the ECB's Market Infrastructure and Payments division, along with Jürgen Schaaf, an adviser in the same division, voiced their concerns in a blog post on the ECB's official site, provocatively titled “ETF approval for Bitcoin – the naked emperor’s new clothes.”

This blog post emerges in a context where the approval of Bitcoin ETFs in the U.S. has been interpreted by some as validation that Bitcoin investments are secure, suggesting a sense of inevitable triumph. However, Bindseil and Schaaf counter this optimism by arguing that Bitcoin's fair value remains at zero, pointing out the potential negative impacts of a Bitcoin boom-and-bust cycle. They highlight concerns over environmental damage and the redistribution of wealth to the detriment of the less informed investors.

The ECB officials reference a previous post from 2022, critiquing Bitcoin's failure to become a globally accepted decentralized digital currency and questioning its suitability as an investment. They argue that Bitcoin does not produce cash flow or dividends, lacks productive use, and offers no societal benefit or value based on unique merits.

While acknowledging that the anticipation of ETF approvals has influenced Bitcoin's price, Bindseil and Schaaf speculate that this could merely be a temporary surge, dismissing it as a speculative bubble bolstered by the Bitcoin lobby rather than a genuine proof of value. They conclude by emphasizing the ECB's ongoing responsibility to regulate Bitcoin, urging vigilance to protect the public from risks such as money laundering, cybercrime, financial exploitation of the uninformed, and environmental harm.

Furthermore, in a separate column dated February 19th, ECB executives, including board member Piero Cipollone, addressed concerns regarding the digital euro. They rebutted claims that its introduction could precipitate a severe banking crisis or that banks might lose deposits as a long-term refinancing source, highlighting the ECB's commitment to carefully navigating the complex landscape of digital finance.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.