It’s hard not to disagree with this blog post. It’s a direct attack on Bitcoin. It’s also surprising that it was published under such a prominent name as the European Central Bank.
It adds to the famous collection of doomsayers who predicted that “Bitcoin would be dead”. Those doomsayers reappear during Bitcoin downturns, which are by now almost as predictable as the seasons.1 Here’s a great overview of previous sceptics:
I think many of the arguments are flawed. The fact that it comes from such a prominent source also warrants clarification and a fact-check.
The current regulation of cryptocurrencies is partly shaped by misconceptions. The belief that space must be given to innovation at all costs stubbornly persists. Since Bitcoin is based on a new technology - DLT / Blockchain - it would have a high transformation potential. Firstly, these technologies have so far created limited value for society - no matter how great the expectations for the future. Secondly, the use of a promising technology is not a sufficient condition for an added value of a product based on it.
“… for an added value of a product based on it.” – uhm, what?
First, the crypto space doesn't "stubbornly" believe in "innovation at all costs", but rather in as little (and smart) regulation as possible, but not less.
They believe that crypto could fix fundamental problems of the legacy parts of our financial system. Regulation was built around a series of financial intermediaries – transfer agents, clearing houses and traditional brokers – which don’t play a part in crypto transactions. Thus, it cannot be treated with the same regulatory frameworks as legacy systems.
Second, bad regulation is notoriously hard to undo or fix.
