ECB: “Bitcoin can’t provide the answer to a cashless society”


According to Europe's leading politicians – Benoit Coeure, a member of the executive branch of the European Central Bank, and Jacqueline Lohe , the president of the Bank of International Settlements – bitcoin and other cryptocurrencies still can't provide an adequate solution for a more and more cashless society. As per a recent report, the claim that cryptocurrencies are rarely used as a measure of worth for goods and services and that they're too slow and expensive to use for payments makes them almost useless in terms of being used as a cash replacement. They also equated storing value in such currencies to gambling in a casino.

Despite still prevailing in the world, cash won't be king for ever as new research by BIS shows that cashless transactions have doubled since the start of this century in the leading 25 countries by BDP. If cash disappeared altogether, the whole economy would depend on nothing but the liquidity of business banks.

BIS in their report claim that a central bank digital currency (CBDC) could solve this problem, but they also point out that there's a high chance of disturbing current economy and the financial system as a whole. Such a decentralzied currency would be much safer but almost completely anti-anonymous when compared to modern day cash. While this would reduce cash funded crime by a large margin, it would also allow banks to own an unprecedented amount of personal client information.

Cash is slowly buy surely retreating into history and the world is turning to new, alternative solutions. Next week, a G20 group of countries will be discussing bitcoin and other cryptocurrencies as well as a CBDC because blockchain technology seems to be seeping into all walks of life much faster than many originally anticipated.

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