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European Central Bankers are truly scared of Bitcoin: Here’s how I know
Instead of trying to think outside the box, these central bankers try to strengthen the box. They want to stay inside the box and lock all Europeans into the box with them.
When you visit the website of the European Central Bank these days, there is a good chance you'll see some article, speech or blogpost regarding "crypto".
As I've said before, the topic has turned into somewhat of an obsession within the ECB. I took a deep dive into the material. Here is what I learned.
It's helpful to see the ECB's perspective like that of a monopolist challenged by a new competitor. The story of Blockbuster vs. Netflix comes to mind. The campaign against Bitcoin and "crypto" is mainly driven by people tasked with developing the digital Euro, a planned Central Bank Digital Currency. The head of this project is an Italian economist named Fabio Panetta.
He's recently been on the offensive against Bitcoin, even calling for an outright ban of the OG cryptocurrency. This is interesting as he doesn't want to ban the other crypto stuff like stablecoins, Ethereum and DeFi, even though his opinion on these things is basically identical with the position a Bitcoin maximalist would take: It's all crap.
This is important as it shows where the lines of conflict really are drawn. Central bankers and Bitcoiners are in agreement about 99% here. I don't know if Panetta and the other people attacking Bitcoin from their comfy chairs in Frankfurt are aware of this or if they even care.
That they would call for a ban of Bitcoin but not any other "crypto" shows how seriously they take the challenge that the technology poses.
They have not been asleep at the wheel. In fact, in one of his latest speeches, Panetta directly refers to an addendum within the EU’s upcoming crypto regulation that could allow for a ban on Bitcoin and proof of work in the future. Something that was only narrowly avoided in the past when European leftwingers tried to smuggle a ban of proof of work into the legislation.
The reason cited for these attacks on Bitcoin is always the same: Energy usage. How convenient that the world’s "best" source for questionable data on Bitcoin’s energy consumption is also working for the Eurosystem — Alex de Vries — a central banker from the Netherlands and the person behind the infamous "Digiconomist".
Two more central bankers who love to bash Bitcoin are Ulrich Bindseil and Jürgen Schaaf, both from Germany. This pair produced a whole series of articles aimed at Bitcoin published in German newspapers and on the ECB's website. In their last piece, they come close to calling the end of Bitcoin. It's "on its way to irrelevancy" they say. The English version is a bit more ambiguous: "Bitcoin’s last stand".
The ECB wants to get rid of this Bitcoin-technology
This is interesting. If Bitcoin is really on its way to irrelevancy, why is Panetta still calling for a ban? Why use mental energy and resources of the state against a thing that seems to be on its way out? That doesn't make any sense.
The only possible explanation: The ECB is truly scared of Bitcoin and wants to get rid of it ASAP. In fact, their words don't show any confidence in their own product — be it the regular Euro or the digital one. Panetta, Bindseil and Schaaf argue that a digital Euro is way better than Bitcoin and that Bitcoin is on its way to irrelevancy anyway.
So why spend so much time with the topic? Why attack Bitcoin? Why try to ban it?
But the smoking gun regarding the ECB’s intentions can be found not within the contents of their speeches and articles — but by looking at what is missing. In hundreds of words they don't manage to mention a single positive thing about Bitcoin or the innovation behind it.
They never seem to ask themselves why Jack Dorsey calls Bitcoin the "native currency of the internet" or why the head of the SEC, Gary Gensler, said: "Nakamoto's innovation is real". They don't spend a second thinking about the European Bitcoin industry or the Ukrainian refugees using Bitcoin to flee a warzone.
As Europeans paying their wages, we should expect much better
This is where we see what is really going on here.
Instead of fixing their own house that is collapsing under inflation. Instead of asking themselves what many people (in Europe and elsewhere) see in Bitcoin.
Instead of trying to think outside the box, these central bankers try to strengthen the box.
They want to stay inside the box and lock all Europeans into the box with them, for they are the masters of the box and don't have any special skills for life outside the box.
It's the exact behaviour we should expect from bureaucrats trying to defend their relevancy. But as someone paying their wages, we should expect more from them.
Sure, argue against Bitcoin and for your monetary monopoly. Make the case for force over freedom. But at least have the decency to spend some time mulling over the reasons why so many people think Bitcoin is great.
I don't know. Maybe they did. Maybe they looked at it and decided it's best to immediately go on the offensive.
Maybe they know: If they don't stop Bitcoin, Bitcoin will stop them.
Until next time, Niko
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