- Isabel Schnabel, Member of the Executive Board of the ECB, has stated that it is wrong to call Bitcoin a currency
- She is concerned that trust in cryptocurrencies could rapidly disappear, causing disruption in financial markets.
Isabel Schnabel, Member of the Executive Board of the European Central Bank (ECB), has described Bitcoin as a speculative asset that doesn’t meet the definition of money.
In an interview with Der Spiegel, which is also available at the ECB’s website, Schnabel said that “in our view, it is wrong to describe Bitcoin as a currency, because it does not fulfill the basic properties of money.”
She argued that Bitcoin is a “speculative asset without any recognizable fundamental value,” which is no stranger to wild price fluctuations.
When questioned whether the fact that a lot of people trust Bitcoin could harm fiat currencies like the Euro, Schnabel said she is more concerned that “trust in cryptocurrencies might rapidly evaporate.” She argued that since Bitcoin “is a very fragile system,” this could result in disruption in financial markets.
Schnabel further rejected the assertion that fiat currencies don’t possess any intrinsic value either.
“The euro is backed by the ECB, which is highly trusted. And it is legal tender,” she said. “Nobody can refuse to accept euro. Bitcoin is a different matter.”
The digital Euro
Schnabel’s words largely echo earlier statements by Christine Lagarde, president of the ECB, who last year said that Bitcoin and other cryptocurrencies pose risks “in relying purely on technology and the flawed concept of there being no identifiable issuer or claim.” Lagarde was also critical of private stablecoins, which–if widely adopted–“could threaten financial stability and monetary sovereignty.”
The ECB is considering the implementation of a digital Euro that could complement cash, However, according to Schnabel, “nothing has been decided yet.”
Schnabel said that a great deal of preparatory work on the digital Euro still remains. She added that from the security point of view, a horizon of four to five years is a reasonable timeframe “required to examine what that means for our monetary system.”
Last week, ECB president Christine Lagarde suggested that a decision on a digital Euro will be made in the next few months—but the actual release could take several years.
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