ECB executive trashes bitcoin but says 69% of central banks are researching digital currencies

Benoit Coeure, who sits on the executive board of Europe's central bank, spoke at the Bank for International Settlements (BIS) about the 3C challenge -- cryptos, cyber and central counterparties. While discussing cryptos, he said: "Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about UK banks’ bailout. In more ways than one, bitcoin is the evil spawn of the financial crisis."

He continued: "Lightning may strike me for saying this in the Tower of Basel -- but bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea. The opportunities of the blockchain are many, but the problems of bitcoin are also plentiful. I believe that Agustín Carstens summed its manifold problems up well when he said that bitcoin is “a combination of a bubble, a Ponzi scheme, and an environmental disaster.”

After getting the bitcoin introduction off his chest, he moved to central bank digital currency saying that central banks are evaluating using distributed ledger technology, aka blockchain, to issue their own digital currencies. Earlier this year, the ECB and BIS published a study on central bank activity in the arena . Mr. Coeure said that "this is a particularly pressing issue in countries where demand for cash has been declining sharply." 

Perhaps the most interesting message was that 69% of central banks are conducting work related to digital currenncies while the remaining ones are typically either small in size or facing more pressing challenges. But he also added that most of the central banks are still at the early stage of studying digital currencies and are unlikely to issue them until the 2020s. (Source: European Central Bank)