According to the ECB, Bitcoin (BTC) is an expensive and wasteful system for international settlements

In a paper listing technologies that could potentially become the “Holy Grail” of cross-border payments, the European Central Bank (ECB) examines Bitcoin (BTC). However, the latter is receiving negative reviews, while stablecoins and central bank digital currencies (MNBC) are getting more positive reviews.

The ECB again expresses its opinion on Bitcoin

The European Central Bank (ECB) published the working report on the search for the “Holy Grail of Cross-Border Payments”, in which he paints an unflattering picture of Bitcoin (BTC). In this 59-page document attributed to Ulrich Bindseil and George Pantelopoulos, several solutions are explored and, of course, there are elements related to our ecosystem.

An international payment system that can claim the status of “Holy Grail” must meet four conditions:

  • Be immediate;
  • Be economical;
  • Have a universal reach;
  • Be a secure means of payment, like central bank money.

As for Bitcoin, this option is processed fifth part and starts with this introduction:

” The [Conseil de stabilité financière] it doesn’t even consider unsecured cryptocurrencies like Bitcoin as a cross-border means of payment. “

The irony of the situation is that the term “bitcoin” is anyway mentioned 199 times in the documentwhich contrasts with the scarce importance it seems to attribute to it.

The report halfway acknowledges that the Lighting Network addresses the problem of speed and low transaction costs, but also highlights many black spots. Again, proof-of-work (PoW) consensus is questioned to be described as expensive and unnecessary.

Note the eternal too subject of crimebut repeatedly contradicted:

“Much of his perceived appeal for cross-border payments stems from the fact that he ran away (so far) to regulatory equal treatment in terms of compliance […]. This has led to the widespread use of Bitcoin for criminal purposes. “

👉 To go further – Discover Alexander Stachchenko’s arguments for defending Bitcoin (BTC)

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The issue of stablecoins and MNBCs

In addition to Bitcoin, the ECB is also focusing stable coins as well as central bank digital currencies (MNBC).

As for stablecoins, the survey highlights the fact that they have interesting qualities for possible use in international settlements. For reasons of financial stability, however, the emphasis is on collateralized stablecoins.

On the other hand, the authors of the report emphasize the sovereignty issues generated by this technology. In this case, a digital asset would then replace the sovereign function of a state, which is the monetary issue.

As for MNBC, the works describe a system with a Forex overlay. This means that each country could use its own currency, but that currency would be converted directly in the target currency. That said, the poor development of MNBCs at this time constitutes an obstacle to the development of this solution for the time being.

Again, we see blockchain-related technologies are interesting, but related assets, such as Bitcoin, create divisions. Often criticized, the latter would still be 56 times less energy consumption compared to the traditional financial system, according to a study by Michel Khazzaka. Furthermore, a transaction with the Lighting Network would be 345,000 times faster than a traditional transaction and 14 times faster than instant payment technologies.

👉 Also in the news – MicroStrategy: Michael Saylor wants to bet on Bitcoin (BTC) and resigns as CEO

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Source: European Central Bank, Michel Khazzaka

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