According to the Director General of the European Central Bank and his advisor, Bitcoin is headed towards becoming ‘irrelevant’ soon.
In a recent blog post, they questioned the value that Bitcoin has so far brought to society and the use case of Bitcoin as an alternative form of money. The blog also said that Bitcoin is rarely used for legal transactions.
However, when nations all over the world are moving closer to regulating cryptocurrencies, the discussion of Bitcoin becoming irrelevant may seem out of context.
“Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should be legitimized.”
The blog said that the current regulation of cryptocurrencies is partly shaped by misconceptions. The shocking comments come as the cryptocurrency market is still reeling from the shock of the FTX collapse. The formerly $32 billion-valued currency exchange collapsed in a couple of days and was forced to declare bankruptcy.
They also called Bitcoin a “polluter” and said, “It’s also worth noting that the Bitcoin system is an unprecedented polluter. First, it consumes energy on the scale of entire economies. Bitcoin mining is estimated to consume electricity per year compared to Austria. Second, it produces mountains of hardware waste.”
Was the Report Biased?
Investor and commentator Joel John used a Chainalysis report that found that only 0.15% of cryptocurrency transactions were associated with illegal activity, compared to 5% for traditional cash.
In a series of tweets, he wrote, “I don’t mean to imply crypto has no funny actors. We had our share of scrupulous players and the regulators are a crucial part of the mix. But a little more effort into how the industry is covered can help us go far. Bias is easy, but it doesn’t deliver progress.”