EU central bank says BTC ‘not a currency’

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The central bank of the European Union has dismissed SegWitCoin (BTC) as ‘not a currency’ at a recent Q&A session, underlining the bank’s dim view of BTC.

The European Central Bank appeared to double down on its previous criticisms of BTC as part of its regular #AskECB sessions on Twitter, in response to a public question on how the bank views the cryptocurrency.

In particular, the bank said it had no plans to add BTC to its reserves, citing underlying deficiencies with the technology, security, scalability and the volatility of the crypto. Quoting the bank’s chief economist Philip Lane, they classified BTC as a particularly volatile type of asset, rather than a currency.

Lane: No. Bitcoin is not a currency, it rather is an asset and it is very volatile #AskECB https://t.co/XQ9Mqdm5rU

— European Central Bank (@ecb) July 9, 2019

The statement backs up previous remarks from the ECB, which has been somewhat dismissive of cryptocurrencies to date.

Earlier this year, a report published by the bank called “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures” suggested there was very little impact on the traditional global economy from cryptocurrencies like BTC.

This tallies with the dismissive tone adopted by the bank on the matter of issuing a central bank backed digital currency, with the ECB saying there were no plans to issue tokens on blockchain for the foreseeable future.

Similarly, central bank heads across Europe have been increasingly vocal in recent weeks about Facebook’s stablecoin proposals, with regulators in France amongst those taking a hard line on plans they say aim to create an alternative financial ecosystem.

The dismissal of BTC as a currency is only the latest blow to the credibility of the crypto, as it continues to struggle with volatile markets.

Plagued by technological challenges, the ECB echoes the view of many in the wider cryptocurrency community in highlighting the technical limitations of using the BTC token for blockchain payments.

While some countries are reportedly considering issuing state-backed crypto tokens of their own, including China, the view from the ECB is representative of feeling across mainstream European finance, where skepticism over BTC remains prevalent.