European Central Bank
Representatives of the eurozone’s main financial institution are skeptical of the historically first cryptocurrency. According to European officials, bitcoin is quite rarely used in the legal field. Yes and as an investment vehicle it is not suitable as it cannot generate cash flows like real estate for example. You can’t get dividends from it like stocks, it doesn’t have practical applicability like commodities, or social benefits like gold.
The European Central Bank (ECB) urges that attempts to regulate the crypto industry should not be confused with endorsing it. Banker officials point out the negative effect bitcoin has on pollution, specifically citing data that miners consume as much electricity as a country like Austria.
The ECB is not going to
support BTC so as not to incur the reputational risks that could arise when many investors suffer losses.
Central Bank of Ireland
The 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 is considered to be in the negative.
According to the Irish Central Bank, for the answer to be in the affirmative, BTC must be a means of saving, accounting and exchange. Bitcoin, on the other hand, unfortunately, does not meet these attributes, the regulator argues. BTC does not satisfy the first two attributes due to its high volatility (which, however, can be argued lately). Representatives of the Irish Central Bank have a dual position on the medium of exchange. On the one hand, bitcoin can sometimes act as such a medium. On the other hand, the Irish central bank is confident: the number of situations where BTC plays the role of a medium of exchange is severely limited: too slow a speed of transactions, too high fees and a lack of price stability.
The bottom line, according to the Central Bank of Ireland, is that bitcoin is a high-risk speculative asset, not a currency.
Bank of England
In the UK, officials have always viewed bitcoin at least cautiously. Bank of England (Bank of England) spokesperson Mark Carney said in 2018 that cryptocurrencies have the potential to revolutionize the world of finance. And emphasized: the rapid evolution of cryptoassets could pose a threat to the traditional financial system.
In 2021, representatives of the British Central Bank warned: bitcoin may be worthless, and investors who invested in it should be prepared to lose all their investments. Here s what one of the bank’s 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 issuance limit factor could play havoc with bitcoin, making bitcoin “ultimately worthless.”
In July 2023, Bank of England Governor Andrew Bailey once again clarified that bitcoin is not money.
US Federal Reserve
U.S. central bank officials demonstrated a change in stance on BTC. Former Fed Chairwoman Janet Yellen has been quite negative about the first cryptocurrency. Just one of her statements:
“I don’t think bitcoin is widely used as a transaction mechanism. I’m afraid it’s being used primarily for illegal operations. This is an extremely inefficient method of conducting transactions, and the amount of energy consumed in conducting these transactions is staggering.”
Current Fed chief Jerome Powell, on the other hand, is less skeptical of the largest cryptocurrency. In his opinion, bitcoin is not able to replace the U.S. national currency, but it can compete with gold as a means of savings.
Bank of Japan
The Land of the Rising Sun has always been loyal to bitcoin. There it was recognized as a means of payment, but with a number of reservations, and BTC has never had and does not have the powers of fiat money.
Here’s what Hiromi Yamaoka, head of the Japanese Central Bank’s settlement and payment system, had to say about bitcoin in late 2017:
“At the moment, I don’t see any problem.. However we need to watch BTC closely.”
The official speculated that there might be some problems:
“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 organization).”
By and large, nothing has changed since then.
People’s Bank of China
The Chinese authorities have always been tough on regulating cryptocurrencies in general and bitcoin in particular. Initially, the ICO was
they banned ICOs, and then they banned all cryptocurrency trading and mining;
banned all cryptocurrency trading and mining.. Interestingly, the current governor of the People’s Bank of China, Pan Gongsheng, back in 2017
said the following:
<blockquote.
“If you sit by the river and watch, one day the corpse of bitcoin will float in front of you.”
Bank of Russia
For all its proximity to China, the Russian regulator is more loyal to BTC. The Central Bank of Russia opposes the use of bitcoin as a means of payment. At the same time, according to Central Bank Chairman Elvira Nabiulina, there is no harm in digital currencies as such.
According to the Central Bank head, the main problem of cryptocurrencies is their anonymity. And since there is no one to be responsible for them, there is no government agency to support cryptocurrencies;
Conclusion
Bottom line: for the most part, the central banks of major countries are not thrilled with bitcoin and are probably not going to recognize BTC as money. However and completely ban bitcoin risked only in China. The other major financial regulators prefer to stick to the golden mean.