‘Bitcoin is not a currency,’ but a highly volatile asset, says European Central Bank’s Chief Economist
The European Central Bank [ECB] is moving towards reviewing its policy framework and along with it, recently carried out an #AskECB session over Twitter. ECB’s executive board member and Chief Economist, Philip R. Lane, answered users’ questions and it wasn’t just about the bank and its policies, but also about cryptocurrency.
As the crypto and Bitcoin community continue to tussle with those supporting gold, Lane was of the view that “Bitcoin is not a currency,” and called it just an asset, while noting its volatility in the market. This reply of Lane was in response to a user’s question about whether adding BTC to ECB’s reserve was the plan. Mati Greenspan, eToro’s Senior Market Analyst questioned Lane’s response and said,
“Gold isn’t a currency either.
What kind of answer is this?!”
While the comment section went berserk with Bitcoin maximalists and non-believers of crypto, another Twitter user asked Lane about regulating Facebook’s new cryptocurrency. When Facebook announced its cryptocurrency Libra, France formed a task force within the group of seven [G7] nations to understand and examine its problems. It is led by ECB Board member, Benoit Coeure. Lane informed the user about this and said,
“Benoît Cœuré, my colleague on the ECB’s Executive Board, leads the G7 working group on stablecoins. The group will present its initial findings on 17 July #AskECB”
Lane kept his distance from questions related to investments, but when Twitter user @keithcarron asked Lane,
“Do you think Structured CryptoCurrency Investments – Debt guaranteed securities, offered by Investment banks, linked to CryptoCurrency indices, hedged with cryptocurrency futures, are a credible way to invest in the crypto-payment space?”
Lane gave a disclaimer of not providing any investment advice, but added,
“By the way, it is a high hurdle for a crypto-asset to satisfy the definition of a currency.”
Even though Banks have been skeptics of cryptocurrency since its inception, with Facebook’s crypto entering the market, ECB has tied its laces and asked regulators to buckle up so as to not “allow them to develop in a regulatory void or their financial service activities, because it’s just too dangerous,” noted Benoit Coeure, according to Bloomberg.