European Central Bank executive board member Benoît Cœuré launched an extraordinary attack on Bitcoin Thursday, calling it “the evil spawn of the financial crisis”. Speaking at the Economics of Payments IX conference, hosted by the Bank for International Settlements (BIS) in Basel, Switzerland, Cœuré stated that Bitcoin was an “extremely clever idea” but that “Sadly, not every clever idea is a good idea.”
Despite his sentiment towards Bitcoin, Cœuré, who chairs a committee at the BIS nicknamed the “bank for central banks”, went to great lengths in his speech to explain how central banks can leverage cryptocurrency in their own payment flows. He repeated the mantra often heard by those with a passing knowledge of blockchain and cryptocurrency, which is “Bitcoin bad, blockchain good”.
Towing the Party Line
Cœuré is not the only member of the BIS who has an issue with Bitcoin. General Manager Agustin Carstens went on record in February to describe Bitcoin as “a combination of a bubble, a Ponzi scheme, and an environmental disaster”. With two high profile members of the same central bank both being highly critical of a system that is designed to undermine them, their statements come across as being somewhat agenda-driven, especially given the lack of factual evidence.
Cœuré neglected to cite other evils spawned around that time, such as the robo-signers used by mortgage lenders that enforced thousands of fraudulent home foreclosures. Or, he could have mentioned the $700 billion bailout of failing banks that, in the words of one article, succeeded in only “committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it.”
Fear and Loathing of Bitcoin
Of course, big banks and their senior staff disliking Bitcoin is nothing new, and indeed it would be almost strange if they did come out and praise it, but rarely are words such as “evil” used to describe the cryptocurrency. Indeed, it could be argued that those who attack Bitcoin the strongest are those who are most fearful of it, or it could simply be that they don’t understand it. Given that Carstens trotted out the well-worn “Ponzi” line, which ten minutes’ research would show is simply untrue, it may well turn out that the latter is more likely.
Even if the likes of Carstens and Cœuré did see the error of their ways however, you can be sure that these central bankers wouldn’t change their stripes – at least in public anyway.