ECB Unconvinced by US ETF Approval, Still Dislikes Bitcoin

Despite recent approvals of Bitcoin spot exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC), the European Central Bank (ECB) remains firm in its anti-crypto stance. In a blog post by Ulrich Bindseil, the Director General of the ECB’s Market Infrastructure and Payments division, and Jürgen Schaaf, an adviser to the same division, the institution refutes the idea that ETF approvals confirm the safety of Bitcoin investments and the success of its recent rally.

The ECB asserts that the fair value of Bitcoin is still zero and warns of the potential harm caused by a boom-bust cycle of the cryptocurrency. They highlight concerns such as environmental damage and the redistribution of wealth at the expense of the less sophisticated. The bankers reference a previous blog post from 2022 which argued that Bitcoin has not fulfilled its promise of becoming a global decentralized digital currency. They argue that Bitcoin is not suitable as an investment as it lacks cash flow, dividends, productivity, social benefits, and outstanding abilities.

While acknowledging that the expectation of the spot ETF approval influenced Bitcoin’s price, the ECB executives believe it may only be a temporary phenomenon. They caution against viewing a speculative bubble as proof of a sustainable price increase and instead suggest that it calls into question the effectiveness of the Bitcoin lobby. The text concludes by emphasizing the ongoing need for regulators to control Bitcoin and protect society from money laundering, cybercrime, financial losses for the less educated, and environmental damage.

In another column, ECB executives, including board member Piero Cipollone, address concerns about the introduction of the digital euro causing a banking crisis and banks losing deposits as a source of refinancing in the long term. The executives present counterarguments to these claims, asserting that the ECB’s digital euro initiative is not expected to lead to a banking crisis and that banks will still play a crucial role in the financial system, even with the introduction of a digital currency.