Blow To Bitcoin As Former ECB Boss Makes Dire Warning Over Crypto’s Future

By: Billy Bambrough

Bitcoin and cryptocurrencies have attracted strong criticism from the world’s central bankers this year–sparked, perhaps, by Facebook’s plans for its own bitcoin rival.

The bitcoin price soared in the first six months of this year only to stall amid concerns lawmakers and regulators could be poised to crack down on the nascent bitcoin and crypto industry.

Now, former European Central Bank (ECB) president Jean-Claude Trichet has slammed bitcoin and Facebook’s libra project, warning bitcoin is “not real” and not the future of money.

“I am strongly against bitcoin, and I think we are a little complacent,” said Trichet, speaking during a panel discussion at Beijing-based media group Caixin’s annual conference last weekend. His comments were first reported by the South China Morning Post newspaper.

“[Bitcoin] itself is not real, with the characteristics that a currency must-have.”

Trichet also slammed bitcoin and cryptocurrency speculation, which he branded “not healthy.”

“Even if [the cryptocurrency] is supposed to be based on underlying assets, I am observing a lot of speculation. It is not healthy,” Trichet said, adding buying a cryptocurrency is “in many respects pure speculation.”

Bitcoin and cryptocurrency adoption has failed to live up to sky-high expectations since bitcoin exploded into the public consciousness in 2017.

Bitcoin soared in 2017 from under $1,000 per bitcoin to almost $20,000, sparking a digital gold rush and making many early adopters overnight millionaires.

Trichet’s remarks come amid excitement in the bitcoin and cryptocurrency industry that China could be about to relax its strict crypto restrictions following a ban on bitcoin exchanges in 2017.

Last month, some bitcoin and cryptocurrency market analysts pointed to comments made by China’s president President Xi Jinping that the country should “seize the opportunity” of bitcoin’s blockchain technology as the reason behind bitcoin’s sudden rally.

“We are already in a domain which has much less physical currency,” he said. “Whether we are in a domain where that will be replaced with crypto? I have doubts there.”

Trichet’s comments echo remarks made by new ECB president Christine Lagarde earlier this year when she warned cryptocurrencies are “shaking the system”—something that could signal a change in the ECB’s approach to bitcoin and crypto and potentially spur adoption.

Elsewhere, the last ECB president, Mario Draghi, has said that bitcoin and crypto “are not designed in ways that make them suitable substitutes for money.”

https://www.forbes.com/sites/billybambrough/2019/11/14/blow-to-bitcoin-as-former-ecb-boss-makes-dire-warning-over-cryptos-future/#65afb0b25e30