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EU Central Banker: “Stop Calling the Bitcoin a Coin”

Dec 28, 2017 Posted /  3400 Views

EU Central Banker: “Stop Calling the Bitcoin a Coin”

European Union central bankers are becoming frequently vocal on the subject of the world’s most famous cryptocurrency, bitcoin. Its sharp price increase this year seems to coincide with wide-ranging declarations, including the digital asset’s threat or lack thereof. Recently, the director of the National Bank of Belgium (NBB) described that more people should be warned about the decentralized currency and how it isn’t a currency at all.

Jan is Not a Bitcoin Fan

“We have to adopt the innovations and the efficiency gains that this can generate for the payment system,” NBB governor Jan Smets explained when asked about the possibility of a state-backed crypto for the Union. His answer came after a barrage of disparaging comments regarding cryptocurrencies’ market leader.

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The NBB is Belgium’s central bank and part of the of the Eurosystem which comprise members of the European Central Bank. Mr. Smets, 66, has been its governor since 2015 after working under two prime ministers as a cabinet chief. In addition to his NBB duties, he participates in a dozen boards, academic and economic.  

Quoted in De Vrije Markt, Mr. Smets explains, “We need to warn people about the bitcoin, and people who invest in bitcoins can lose a lot.” With its being created into new financial products, the digitalcurrency could potentially be catastrophic for wider marketplaces due to its unpredictable nature.  “Even if the risks are little at the moment,” Mr. Smets answered.

Not a Coin

The last time a fantastic report was made by NBB regarding bitcoin came back in Summer of 2014 as a joint report including its Belgian Financial Services and Markets Authority. In it, they warned about it's not right tender, hacking, fluctuations and the usual litany of risks bitcoiners are all too familiar with. In the previous statement, Belgium was considered to be at the lead of crypto in Europe, at least in some circles.

Three and a half years later, Mr. Smets worries about the purchasing power of the decentralized currency, pointing to its lack of stable backing such as that which the euro has with its tether to the European Central Bank. Bitcoin’s price moving from 1,000 USD at the beginning of 2017 to around 15,000 USD only sustains his argument, he believes.

Finally, the EU central banker urges:

“Let’s stop calling the bitcoin a coin. Unlike the euro, the bitcoin is not affirmed by a central bank or management as a means of payment, so the bitcoin is not a currency,” he told. 

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Tags: Jan Smets EU Central Banker bitcoin

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