In a speech at the Economics of Payments IX conference in Basel on Thursday, European Central Bank Executive Board Member Benoît Cœuré shared his thoughts on the continued digitization of payments and market infrastructure. During his talk, Cœuré covered the current state of central bank-issued digital currencies (CBDCs) and managed to take a few shots at bitcoin along the way.
Central Banks Working on Digital Currencies, But Issuance Unlikely Soon
When discussing digital currencies, Cœuré first pointed out that the Committee on Payments and Market Infrastructures of the Bank for International Settlements (of which he is the chair) has been studying cryptocurrencies and distributed ledger technology (DLT) for quite some time. He specifically pointed to the committee's report on cryptocurrencies from 2015 and their report on DLT from last year.
While Cœuré shared polling statistics that indicated 69% of central banks are currently conducting work related to CBDCs, he also made it clear that these developments are still in the early stages.
“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,” said Cœuré.
Taking Shots at Bitcoin
While Cœuré mostly discussed CBDCs when on the topic of cryptocurrencies, he also briefly shared his overall view on bitcoin. In short, his view on the world’s most successful crypto asset was quite negative.
At one point, Cœuré stated, “Bitcoin is the evil spawn of the financial crisis.”
Cœuré then went on to agree with International Monetary Fund General Manager Agustín Carstens’s contention that bitcoin is a “combination of a bubble, a Ponzi scheme[,] and an environmental disaster.”
Although he didn’t get into specifics, it’s clear Cœuré does not think highly of bitcoin. Ironically, the backdoors that are likely to be included in the CBDCs Cœuré discussed in a more friendly tone are likely to provide an incentive for more people to use bitcoin in the future (as we discussed yesterday).