One of the Eurozone’s chief monetary economists heaped some backhanded praise at Bitcoin on Thursday, arguing that the flagship cryptocurrency was an “extremely clever idea” that suffers from “manifold problems.”
Benoît Cœuré, who serves on the European Central Bank’s executive board, made this claim during remarks at the Economics of Payments IX conference, which is being hosted this week in Basel, Switzerland by the Bank for International Settlements (BIS).
Cœuré, who chairs the Committee on Payments and Market Infrastructure at the BIS — which is nicknamed the “bank for central banks” — devoted a lengthy section of his speech to cryptocurrency technology and how central banks can leverage it in their own payment flows.
Noting that the pseudonymous Satoshi Nakamoto had released Bitcoin during the throes of the Great Recession — even going so far as to permanently enshrine a headline about the UK bailouts in the network’s Genesis block — Cœuré said that, “In more ways than one, Bitcoin is the evil spawn of the financial crisis.”
“Evil spawn” or not, though, Cœuré said that he could not deny that Bitcoin was “extremely clever,” even if he does agree with BIS chief Agustín Carstens’ unforgettably bombastic characterization of crypto as “a combination of a bubble, a Ponzi scheme and an environmental disaster.”
Cœuré said:
“Lightning may strike me for saying this in the Tower of Basel – but Bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea. The opportunities of the blockchain are many, but the problems of Bitcoin are also plentiful. I believe that Agustín Carstens summed its manifold problems up well when he said that Bitcoin is ‘a combination of a bubble, a Ponzi scheme and an environmental disaster.’”
The French economist went on to note that, criticisms of decentralized cryptocurrencies aside, more than two-thirds of central banks are exploring how to use distributed ledger technology (DLT) to create central bank digital currencies (CBDC), with an eye toward cross-border remittances-related payment services. He stressed, however, that it’s unlikely a central bank will issue a digital currency within the next decade.
