SUERF, the European Monetary and Finance Forum, published a paper criticizing Bitcoin. The document, “The encrypted threat: Bitcoin’s social cost and regulatory responses,” was authored by three executives of the European Central Bank (ECB), including one of its Director Generals, Ulrich Bindseil. A footnote states the paper expresses the personal opinions of the authors. It’s noticeable that Bitcoin alone is the paper’s primary focus.
The document outlines the usual criticisms of Bitcoin: retail investors will lose money when it crashes, its wasteful use of energy, and its use by criminals. However, its approach is pretty thorough. From an investment perspective, it highlights that the money invested in Bitcoin might otherwise flow into productive investments such as stocks or commodities.
Bitcoin alone is the target of the criticism, rather than crypto-assets more generally. It states that “doubts on the sustainability of Bitcoin and the related social costs does not mean that DLT, blockchain and decentralised finance have no merits as innovative technological approaches.” However, it questions whether crypto tokens other than stablecoins and NFTs represent a meaningful investment asset.
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