Central Banker’s Bitcoin Blues

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An adviser to the European Central Bank (ECB) has, shall we say, *expressed his displeasure* with Bitcoin, much like a particularly grumpy babushka confronted with a plate of borscht she finds too spicy.

“Nation-state Bitcoin reserves are a risky idea,” Jürgen Schaaf, the ECB’s resident Bitcoin skeptic, told CryptoMoon. Apparently, Schaaf believes that governments should stick to hoarding things like oil and gas, because, you know, those are *real* economic necessities. Bitcoin? Not so much. According to Schaaf, Bitcoin is as useful as a chocolate teapot ☕ when it comes to actual economic stability.

“There is no real economic need for Bitcoin,” he declared, as if delivering the final verdict in a Dostoevsky novel. “It has no real economic necessity or relevant usage.”

Schaaf’s stance echoes the recent pronouncements of ECB President Christine Lagarde, who, much like a seasoned matriarch, has declared Bitcoin unworthy of a place in the European central bank’s reserves.

Schaaf went on to compare Bitcoin to a volatile, untrustworthy lover, prone to dramatic swings in mood and prone to attracting unsavory characters. He argued that Bitcoin’s extreme volatility, its susceptibility to illicit use, and its potential for manipulation make it unsuitable for central banks.

“Adding Bitcoin to the ECB reserves would not stabilize the single currency,” he warned. “It would merely fuel speculation and wealth redistribution.”

He even scoffed at the idea of central banks holding a diversified portfolio of cryptocurrencies, claiming that only amplify the risks and exposure to speculative assets with “often no fundamental economic utility.”

“Whether Bitcoin alone or a mix of digital assets, the risks remain high, and the economic justification is weak,” Schaaf concluded, delivering a final blow to the crypto optimists.

Schaaf’s comments came at a time when the crypto markets were undergoing a particularly turbulent period, with analysts recording a staggering $1.5 billion in crypto liquidations in just 24 hours. Bitcoin, which had reached dizzying heights of $106,000 just a few weeks prior, was now plummeting, dropping below $88,000 for the first time since mid-November.

Meanwhile, some Bitcoin proponents argued that BTC could help governments manage their financial burdens. They pointed to a report by VanEck, which estimated that the US could reduce its national debt by 35% in the next 24 years if it created a reserve of 1 million Bitcoin.

But others remained skeptical, questioning whether accumulating Bitcoin was a realistic solution to the US’s massive debt problem.

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2025-02-25 17:24