Bitcoin has been a problematic topic for some time now, mostly because it lacks the characteristics of a currency and is purely speculative. This is at least what the ex European Central Bank chief Jean-Claude Trichet thinks about the leading cryptocurrency. His statement is viral in the crypto news today after he spoke to South China Morning Post on November 10 – and the publication reported that he made the remarks at the Caixin conference in Beijing.
During this event, Trichet also expressed doubt that cryptocurrencies could ever become the future of money. The ex European Central Bank chief said that Bitcoin lacks the characteristics of a real currency:
“I am strongly against Bitcoin, and I think we are a little complacent. […] The currency itself is not real, with the characteristics that a currency must have.”
Trichet was also in the Bitcoin news for explaining that he believes the process of buying cryptocurrency is in a lot of respects only speculation. He claimed that even when a cryptocurrency asset is said to be backed by a real asset, he still observes a lot of speculation around it which he addressed as “not healthy.”
The ex European Central Bank chief added that he is definitely not a fan of Facebook’s upcoming Libra cryptocurrency and stablecoin. As he noted, he prefers the Special Drawing Rights (SDRs) issued by the International Monetary Fund.
Just like Libra’s plans, SDRs are backed by a basket of currencies which include the US dollar, the Euro, the British Pound Sterling (GBP), Renminbi and Yen. As the ex European Central Bank chief, there are many doubts surrounding this model:
“I have great doubts of keeping control of monetary value in [the cryptocurrency] domain. […] In the so-called new stable international currencies […] the SDR would be the right basket.”
Trichet also noted that while the world may be leaving banknotes and coins behind, cryptocurrencies could not be the way forward. As we also reported in September this year, another former ECB president named Mario Draghi echoed Trichet and stated that cryptocurrencies and even stablecoins “are not designed in ways which make them suitable as substitutes for money.”
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