A member of the executive board of the European Central Bank, Coeuré on Thursday called the first cryptocurrency the “evil spawn of the financial crisis” a decade ago.
In a speech at the Economics of Payments IX conference in Basel, Coeuré said that “bitcoin was an extremely clever idea. Sadly, not every clever idea is a idea. The opportunities of the blockchain are many, but the problems of bitcoin are also plentiful.”
Coeuré isn’t the only high-ranking European banking official to come down harshly on bitcoin this year. In a Feb. 6 speech at Goethe University in Frankfurt, Agustín Carstens, the head of the Basel-based Bank for International Settlements (BIS) said the cryptocurrency was a “combination of a bubble, a Ponzi scheme and an environmental disaster.”
Coeuré had less-frosty words on the topic of central bank digital currencies, or CBDCs. He noted that central bankers from the G10 countries along with the BIS’ Markets Committee have been studying their potential use.
“This is a particularly pressing issue in countries where demand for cash has been declining sharply,” he said. “Sveriges Riksbank [Sweden’s central bank], for example, may soon start an inquiry to draw up concrete proposals for the amendments of the Sveriges Riksbank Act to eventually pave the way for the introduction of the e-krona.”
In most other jurisdictions, however, Coeuré said there is more time to continue studying the technology and its implications for monetary policy and the financial stability of central banks.
Although he noted that many central banks are conducting work on CBDCs, Coeuré also said it will take time for one to go into real use.
Citing a recent survey of central bankers, he said, “There is broad agreement that a CBDC, in whatever form, is unlikely to be issued within the next decade, even among those four central banks that have indicated that they have reached the stage of developing a pilot project.”
His remarks come a day after International Monetary Fund Managing Director Christine Lagardethat “various central banks around the world are seriously considering” state crypto including Canada, China, Sweden and Uruguay. “They are embracing change and new thinking, as indeed is the IMF,” she added.