ECB Director Calls for Bitcoin Ban, Says BTC Not Suitable for Payments or Investments

• The head of the European Central Bank stated that Bitcoin should not be legalized.
• The bank’s director general Ulrich Bindseil states that regulation of cryptocurrencies is not the same as legalization.
• The blog post from the central bank comes after the FTX exchange filed for bankruptcy on 11 November.

The European Central Bank (ECB) detailed its stance on Bitcoin (BTC) and the cryptocurrency ecosystem in a blog post on November 30. In this article, the financial institution outlined the stark differences between the regulation of digital assets in Europe and the US and that they should not be legitimized.

FTX implosion and regulators

This development comes after FTX, one of the largest exchanges in the world, imploded and filed for bankruptcy. As a result of the exchange’s fallout, many creditors have millions stuck on the platform waiting for a decision.

This dark spot in the cryptocurrency ecosystem’s timeline has attracted many critics to say, “I told you so.” However, cryptocurrency enthusiasts such as Changpeng Zhao, the founder of the Binance exchange, remain optimistic and have come together and allocated billions to help the crypto ecosystem.

The European Central Bank warns of Bitcoin’s long-term damage to traditional finance

ECB Director General Ulrich Bindseil and Advisor Jürgen Schaff outlined the negative impacts of cryptocurrencies and how regulators are not on the same page.

Bindseil and his colleagues’ criticisms include the system’s high energy consumption, its waste products, and BTC’s suitability as a payment system or form of investment.

The blog further adds that since it is neither an efficient payment system nor an investment, “it should be treated as neither in regulatory terms and therefore should not be legitimized.”

The financial industry should be wary of the long-term damage of promoting Bitcoin investments – despite the short-term profits they can make (even without their skin in the game).

In addition, the duo further outlines the stark difference between how Europe and the US approach the crypto space in terms of regulation. The blog said,

While the EU has agreed on a comprehensive regulatory package… Congress and the US federal government have not yet been able to agree on coherent rules.

Bindseil and Schaff add that current regulation of digital assets is “partly shaped by misconceptions” and the belief that laws should not hinder “innovation.”