European Central Bank Deems Bitcoin a "Speculative Asset," Prefers Digital Euro

The European Central Bank (ECB) is exercising caution regarding Bitcoin, with ECB Executive Director Isabel Schnabel describing it as a speculative asset that does not possess the characteristics of money. The ECB's focus lies on the development of a digital euro, set to launch in 2026, aimed at providing a secure and efficient instrument for daily payments.

Bitcoin as a Speculative Asset:

Isabel Schnabel, responding through the ECB X account, clarified that the ECB has no intention of purchasing Bitcoin, considering it a speculative asset lacking intrinsic economic value. She emphasized the high volatility and associated risks of using Bitcoin as a speculative instrument, stating that its market valuation is purely based on speculation.

Digital Euro Development:

The ECB's cautious approach to crypto-assets aligns with its commitment to developing a digital euro. Scheduled for launch in 2026, the digital euro is envisioned as public money issued directly by the European Central Bank. Schnabel emphasized that the digital euro would co-exist with paper money, not aiming to replace it. The ECB seeks to uphold the euro's role in a cashless society while avoiding dependence on private alternatives.

Privacy Concerns Addressed:

Addressing concerns about personal privacy associated with a central bank digital currency (CBDC), Schnabel asserted that a digital euro would provide an additional payment option, backed by the ECB and adhering to the highest privacy standards. She compared it to cash, highlighting its simplicity and widespread usability throughout the euro area.

Strategic Vision for a Regulated Digital Euro:

The ECB's decision to reject Bitcoin aligns with its strategic vision for a regulated and controlled digital euro. By emphasizing the importance of a central bank-issued digital currency in the European Union's financial landscape, the ECB aims to ensure regulatory supervision, control, and privacy standards.

The European Central Bank, led by ECB Executive Director Isabel Schnabel, dismisses Bitcoin as a speculative asset and emphasizes its commitment to developing a digital euro. Schnabel cited the lack of intrinsic economic value and high volatility of Bitcoin, aligning the ECB's approach with its vision for a regulated and controlled digital euro. The ECB aims to maintain the euro's role in a cashless society while addressing privacy concerns and preventing dependence on private alternatives.