- ECB officials claimed that BTC’s rally will make non-holders and latecomers poor.
- The crypto community criticized the report that called for a policy against BTC.
As a seasoned researcher with over two decades of experience in the financial industry, I have seen countless instances where traditional institutions struggle to adapt to new technologies and paradigms. The recent report by ECB officials claiming that Bitcoin’s rally will impoverish latecomers and non-holders is yet another example of this resistance to change.
Over the course of the weekend, the European Central Bank (ECB) made news with a critical report about Bitcoin [BTC] and appeals for it to be phased out.
It was asserted that the increase in Bitcoin’s price would result in a transfer of wealth, moving it from those who joined or didn’t own it later to those who were early adopters.
Based on the findings, this situation could lead to financial hardship for those who come later and current holders, since early adopters might end up controlling most of the assets and wealth.
As per ECB officials Jurgen Schaff and Ulrich Bindseil’s perspective, individuals who do not own Bitcoin are encouraged to promote or push for policies against it, or even advocate for its complete removal or disappearance. A part of their research suggests this stance.
“Individuals who don’t currently own Bitcoin should understand that there are significant arguments for opposing it and advocating for laws to either control its price or eliminate it entirely.
Is the ECB declaring war on BTC?
The crypto community slammed the report, while some warned it could signal the ECB’s war on BTC.
According to Bitcoin analyst Tuur Demeester, the ECB’s statement can be seen as a declarative act of hostility towards digital assets. In simpler terms, he suggested that the ECB’s stance is essentially an open conflict against these digital assets.
As a researcher, I find myself deeply intrigued by this recently published paper. It appears as if the European Central Bank is essentially declaring an economic war of sorts: they argue that early adopters of #bitcoin are essentially siphoning off economic value from those who join later. I can’t help but feel a sense of impending regulatory action, as I anticipate authorities may leverage this ‘Luddite’ argument to impose stringent taxes or even enact prohibitions.
One of the strong factors that influenced Demeester’s prediction was the call for legislation made by the authors.
Afterward, they boldly propose laws aimed at limiting or even eliminating Bitcoin’s value increase, or its complete disappearance, allegedly to avoid societal fragmentation.
Max Keiser, who is a Bitcoin maximalist and an advisor to President Nayib Bukele of El Salvador on Bitcoin-related issues, labeled the report from the European Central Bank as the ECB’s “flunked assessment” or “failed intelligence test” regarding cryptocurrency.
“Bitcoin is an IQ test. The ECB failed.”
It’s worth noting that the regulatory body has previously expressed concerns about Bitcoin. Back in February 2024, they declared that Bitcoin lacked inherent worth and was more of a speculative bubble prone to bursting, which could lead to significant societal harm.
Toward the end of June, Fabio Panetta – a previous ECB official now serving as Governor of the Bank of Italy – advocated that financial institutions should prevent cryptocurrencies due to their predicted imminent collapse.
In fact, the regulator even criticized the US move to approve spot BTC ETFs in Q1 2024.
In summary, some people saw the regulator’s criticism of Bitcoin as a tacit recognition of its potential for significant future growth.
As per Plan C, a financial expert named a market analyst, Bitcoin (BTC) was proposed as a remedy for the regulator’s practice of creating more money (inflation), since we are entering a global period of monetary relaxation.
The recent ECB report subtly implies that Bitcoin’s growth may be sustained. This is due to the ECB’s belief that central banks will likely increase the amount of money they print significantly and continuously in the future.
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2024-10-21 00:08