“Eliminate Bitcoin”: ECB concerns highlighted by latest anti-BTC rant

In an October 20 post on X, Jürgen Schaaf, the ECB's senior adviser for market infrastructure and payments operations, called Bitcoin “a speculative bubble that will eventually burst.”

He argued that this would leave “significant social harm through high energy use and facilitating illegal payments.”

This anti-Bitcoin outburst follows a European Central Bank paper that Schaaf co-authored last week, which argues that long-term holders of BTC are making new market participants poorer.

Central bank bitcoin riot

Scharf argued that even if Bitcoin prices continue to rise and the bubble does not burst, “wealth gains by early adopters will come at the expense of latecomers and non-holders.”

This would lead to “significant redistributive effects,” he added, making an even more outlandish claim.

“Regardless of whether they own Bitcoin or not, the wealth and consumption of early holders will increase, while everyone else will become poorer.”

He also argued that this redistribution of wealth could “destabilize society” as late entrants become dissatisfied as their purchasing power declines.

The solution for central bank advisors was simple: phase out Bitcoin.

“Non-holders should recognize that Bitcoin’s rise is fueled by wealth redistribution at their expense. There are compelling reasons to make that claim.”

11/ Bitcoin can influence elections in democracies. Crypto-friendly candidates may gain support from early adopters and influence outcomes that support policies that harm non-holders.

— Jurgen Schaaf (@schaaf_jurgen) October 20, 2024

Steven Smith, CEO of Celestial Mining Management, made a good rebuttal in that it is the marginal buyers and sellers that determine the value of BTC.

“What is important is that bureaucrats do not impose sacrifices on others or intervene based on what is 'fair' or 'good' or any other idea.”

He said that simple properties like this make BTC so valuable that enough of humanity “chooses to store their wealth in BTC rather than other financial instruments that people like you prefer.” Probably,” he added. [central banks] They control it directly or indirectly through a system of debt and money. ”

Why central banks hate Bitcoin

Decentralized assets controlled by the public pose a major threat to central banks, as they are all about managing debt and the value of money.

Additionally, the ECB is promoting a programmable digital Euro CBDC (Central Bank Digital Currency) that is highly controlled and used only for payments, not investment or holding.

The Federal Reserve Bank of Minneapolis suggested as much in a paper last week. They argued that Bitcoin should be taxed or banned because it prevents governments from effectively managing debt through “perpetual deficits.”

In reality, central banks and governments' money printing and questionable fiscal policies are impoverishing people through inflationary cycles and gradual devaluation of fiat currencies, not Bitcoin.