More and more central banks from various countries are launching versions of national currencies on the blockchain, CBDC. The digital yen, pound and ruble are already becoming a reality. And what do the main financial authorities think about bitcoin?

European Central Bank

Representatives of the main financial structure of the eurozone are skeptical towards the historically first cryptocurrency. According to European officials, bitcoin is rarely used in the legal field. And as a means for investment, it is not suitable, since it cannot generate cash flows, such as real estate. It doesn’t pay dividends like stocks, it doesn’t have practical applicability like commodities, or social benefits like gold.

The European Central Bank (ECB) urges not to confuse attempts to regulate the crypto industry with its approval. Banking officials note the negative effect that bitcoin has on environmental pollution, in particular, they cite data that miners consume as much electricity as a country like Austria.

The ECB is not going
support BTC, so as not to incur reputational risks that may arise when many investors suffer losses.

Central Bank of Ireland

Irish Central Bank (Banc Ceannais na hÉireann or Central Bank of Ireland) on its official website asks the question: is bitcoin a currency and can it function as money? And the answer to it is considered negative.

According to the Irish Central Bank, for the answer to be yes, BTC must be a store of value, accounting and exchange. Bitcoin, unfortunately, does not meet these criteria, the regulator claims. BTC does not satisfy the first two signs due to its high volatility (which, however, can be argued in recent times). Regarding the means of exchange, representatives of the Irish Central Bank have a twofold position. On the one hand, bitcoin can sometimes act as such a tool. On the other hand, the Irish central bank is sure that the number of situations where BTC plays the role of a medium of exchange is very limited: too slow transaction speed, too high commissions and lack of price stability.

As a result, according to the Central Bank of Ireland, bitcoin is a high-risk speculative asset, not a currency.

Bank of England

In the UK, officials have always viewed bitcoin with at least apprehension. Bank of England spokesman Mark Carney said in 2018 that cryptocurrencies could revolutionize the world of finance. AND emphasized: The rapid evolution of crypto assets could pose a threat to the traditional financial system.

In 2021, representatives of the British Central Bank warned that bitcoin may be worth nothing, and investors who have invested in it should be prepared to lose all their investments. Here is what one of the bank employees Thomas Belsham wrote about BTC:

“The problem is that bitcoin is not issued to value anything other than itself. Although crypto enthusiasts are pleased with themselves, saying: “one bitcoin = one bitcoin”. But tautology does not make an object a currency.”

According to the official, the 21 million emission limit factor can play a cruel joke with bitcoin, having done “At the end of the day, bitcoin is worthless.”

In July 2023, Bank of England Governor Andrew Bailey once again clarifiedthat bitcoin is not money.

US Federal Reserve

Official representatives of the American central bank demonstrated a change in position in relation to BTC. The former head of the Fed, Janet Yellen, spoke in a rather negative way about the first cryptocurrency. Only one of her statements:

“I don’t think bitcoin is widely used as a transactional mechanism. I’m afraid that it is used primarily for illegal operations. This is an extremely inefficient method of conducting transactions, and the amount of energy consumed during these transactions is staggering.”

But the current head of the Fed, Jerome Powell, is less skeptical about the largest cryptocurrency. In his opinion, bitcoin is not able to replace the American national currency, but it can compete with gold as a store of value.

Bank of Japan

In the Land of the Rising Sun, Bitcoin has always been loyal. There it was recognized at one time as a means of payment, although with a number of reservations, and BTC never had and does not have the authority of fiat money.

Here is what Hiromi Yamaoka, head of the settlement and payment system of the Japanese Central Bank, said about bitcoin at the end of 2017:

“At the moment I don’t see any problems. However, we need to keep a close eye on BTC.”

Official assumedthat some problems may arise:

“If the risks turn out to be huge, we will have to respond adequately and work to maintain financial stability together with the Financial Services Agency (Japan’s financial supervisory body).”

By and large, nothing has changed since then.

People’s Bank of China

The Chinese authorities have always been tough on the regulation of cryptocurrencies in general and bitcoin in particular. Originally there
banned ICO and then
banned any cryptocurrency trading and mining. Interestingly, the current head of the People’s Bank of China, Peng Gusheng, back in 2017
said following:

“If you sit by the river and watch, then one day the corpse of bitcoin will float in front of you.”

Bank of Russia

With all the proximity to China, the Russian regulator is more loyal to BTC. The Central Bank of the Russian Federation opposes the use of bitcoin as a means of payment. At the same time, according to the Chairman of the Central Bank Elvira Nabiulina, there is no harm in digital currencies as such.

According to the head of the Central Bank, the main problem of cryptocurrencies is their anonymity. And since there is no one to be responsible for them, the state structure cannot support cryptocurrencies either.

Conclusion

Bottom line: for the most part, the central banks of large countries are not enthusiastic about bitcoin and are probably not going to recognize BTC as money. However, only China ventured to completely ban bitcoin. The rest of the main financial regulators prefer to stick to the golden mean.