Isabel Schnabel, a member of the European Central Bank’s (ECB) Governing Council, has attacked bitcoin, saying that the crypto-activity does not meet the fundamental characteristics of money. It also describes bitcoin as a speculative asset with no discernible fundamental value and subject to huge price fluctuations. Schnabel also suggests that confidence in cryptocurrencies could quickly evaporate, leading to disruption in financial markets.
In a recent interview, Schnabel also reveals that she and her colleagues at the ECB believe it is wrong to call bitcoin a currency. However, when Schnabel addressed billionaire Elon Musk’s views on bitcoin, the ECB board member responded: He has the right to do that.
Meanwhile, Mr Schnabel took the opportunity in an interview to confirm the ECB’s intention to create its own digital currency. However, she said there is still a lot of preparatory work to be done before the project can be properly implemented. Mr Schnabel also tries to support the claim that consumers would be more receptive to an ECB-issued digital currency than to one issued by private companies. She said:
No one can provide the same level of security and data protection as the ECB. People think this question is important: Who do we, as consumers, want to disclose our data to? They probably trust the ECB more than Facebook or other private providers.
As expected, Schnabel’s comment on Twitter prompted quick reactions from some bitcoiners and cryptocurrency enthusiasts. For example, in response to Schnabel’s comment that the ECB is a trustworthy institution, Twitter user Plan B said:
The people of Zimbabwe, Venezuela, Lebanon and Turkey are demanding change (after what the central banks have done to their money).
Human rights and data protection
Alex Gladstein, chief strategist of the Human Rights Foundation, also participated in the discussion by posing a question to the ECB Executive Board member. He asked:
Isabel, to what extent have you thought about the human rights implications of Bitcoin? I know of many examples around the world of individuals and groups benefiting from the use of this new currency in a highly inflationary and authoritarian environment.
Meanwhile, other users attacked Mr Schnabel’s claim that no other institution can provide the same level of security and data protection as the ECB. For example, user Ryan Quinar reminds Schnabel that any cryptocurrency blockchain literally offers more security than any system your company can think of.
However, some users, such as Michael Reilly, believe that there is a place for private digital currencies and the currency planned by the ECB. He said:
Central bank policies are the least of the problems in each of these countries. Institutional failure or an institutional problem will and can affect everything that happens in a country. The CB is not a problem. I own bitcoins and I think they have their uses. The digital euro is also a good idea.
What is your reaction to Schnabel’s comments on bitcoin? You can share your thoughts below in the comments section.
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