ECB adviser calls for policies to curb Bitcoin growth

Jürgen Schaaf, an adviser to the European Central Bank (ECB), has suggested Bitcoin (CRYPTO:BTC) should be eliminated, citing concerns over its speculative nature and societal impacts. 

In a post on X on Oct. 20, Schaaf labeled Bitcoin “a speculative bubble that will eventually burst,” and added that its energy consumption and use in illicit payments could cause “substantial social damage.” 

According to Schaaf, even if Bitcoin prices continue rising, the wealth gained by early adopters comes at the expense of later investors and non-holders. 

He claimed this wealth redistribution could destabilise society, as non-holders and latecomers see their purchasing power eroded, leading to frustration. 

“Early holders’ wealth and consumption rise while others get poorer, regardless of whether they ever own Bitcoin,” Schaaf stated. 

He further added that, "non-holders should recognize that Bitcoin’s rise is fueled by wealth redistribution at their expense. There are compelling reasons to advocate for policies that curb Bitcoin’s growth or even eliminate it." 

This anti-Bitcoin stance follows a recent paper co-written by Schaaf for the ECB, which argued that long-term BTC holders profit while new participants suffer losses. 

The paper fueled backlash from the crypto community. 

Steven Smith, CEO of Celestial Mining Management, responded by pointing out that Bitcoin’s value is determined by market participants rather than central authorities. 

He remarked, “The whole point is that we don’t have bureaucrats bloviating or intervening at everyone else’s expense based on what they think is ‘fair’ or ‘good.’” 

The ECB’s push for a central bank digital currency (CBDC) like the digital euro, which will be tightly controlled, contrasts sharply with Bitcoin’s decentralised nature, according to critics. 

At the time of writing, the Bitcoin price was $68,703.90.