Cryptocurrencies are not having a good time. The world’s second-largest crypto exchange, FTX, recently filed for bankruptcy. Its chief executive, Sam Bankman-Fried, has stepped down and is now reportedly being investigated for potential misuse of customer funds. Even before the latest meltdown, the cryptocurrency market has been dizzyingly volatile for some time.

Could the future, however, still belong to digital currencies? Bitcoin and other decentralised cryptocurrencies based on blockchain technology have been around for over a decade now. The European Central Bank is even exploring the possibility of a Digital Euro, a “central bank digital currency”. Could these technologies be the future of money?

When, in 2018, we spoke to the former President of the European Central Bank, Mario Draghi, we asked him his opinion on Bitcoin. He told us then that he would not call Bitcoin a currency for a couple of reasons. One of them was that “a Euro today is a Euro tomorrow. Its value is stable. The value of Bitcoin oscillates wildly”. Isn’t this a big problem for cryptocurrencies like Bitcoin? How can we use them as currency if their value isn’t stable?

What do our readers think? We had a comment from David, who is afraid of being monitored when using credit cards or PayPal. Purely digital cryptocurrencies like Bitcoin, he says, can be used anonymously. Is David right? Does that mean that cryptocurrencies are the future?

To get a response, we put David’s comment to Stefan Hardt, Director General of Cash Management of the Deutsche Bundesbank. What would he say?

I don’t believe in that. First of all, Bitcoin is not a currency. Many criteria that a currency has to fulfil are not fulfilled by Bitcoin. We therefore call it a crypto token. Especially if we look at the price fluctuations, it becomes clear that Bitcoin is more of a speculative object, if we are quite honest. Even when I discuss this with family, friends or colleagues, I say that the use of Bitcoin as an actual means of payment is very limited after all. So no, I don’t think Bitcoin is the future. I think we will continue to have a coexistence of cash and cards, i.e. non-cash payments. And everyone will have to decide for themselves what they prefer. Cash has advantages. But if you ask card users, they will also show you a whole range of advantages. One point that crosses my mind, especially when I pay with cards, is that I am basically paying twice.

On the one hand, I pay a fee so that I can have the card, and on the other hand, I pay with my data and payment information, which of course can be evaluated or sold by the companies. In this respect, everyone has to weigh up for themselves what is important to them. If privacy is important to them, then they are in good hands with cash. If that is not so important to them and they see card payments as particularly fast and efficient, they should pay by card. And if they want to pay with Bitcoin or another crypto token, let them do so. Ultimately, everyone should be able to decide for themselves how they want to pay. The important thing is that we have the alternatives. That’s the crucial thing, that we all have a portfolio of payment options. They should be preserved. And then each of us will use what we are convinced is best for ourselves.

We also had a comment come in from Jonathan, who thinks digital currencies are definitely the future: “This is the 21st century. If I want to pay my taxes in Bitcoin or gold bullion or whatever, why not? It would make the continent so much more dynamic.”

Back in 2020, we spoke to German Christian democratic MEP Stefan Berger, a member of the European Parliament’s Committee on Economic and Monetary Affairs. Here’s what he said at the time, particularly in light of Facebook’s then-proposed (now shelved) digital currency called “Libra”:

[The fear is that digital currencies like Libra] could be used to launder drug money and black market money. You can, of course, take measures against that, for example, all those who participate in Libra would have to identify themselves through a Know Your Customer process, so everyone with an account has to identify themselves. However, if it’s a global currency, then you have to ask how that process would be enforced [outside of Europe].

There are many, many questions connected to this Libra project that have not yet been solved… be it money laundering or financing of undesirable projects such as terrorism… As long as these questions have not been clarified, I think we should proceed carefully and not allow it in Europe, and continue discussions about this technology for the time-being.

Are cryptocurrencies and digital currencies the future of money? Will they facilitate black markets and terrorism, or are they the logical next step for finance? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!

Image Credits: CC-A-3.0 – Cointelegraph
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the granting authority can be held responsible for them.

6 comments Post a commentcomment

What do YOU think?

  1. avatar
    EU-Reform Proactive


    Wasn’t Mr Stefan Hardt heard loud & clear the previous time?

    Whether one should ‘trust’ a youngster who still likes to sleep on a beanbag, spend his life playing videogames or any pretender(s) and promoter(s) of weird things wearing a suit & tie with any valuables is in the final analysis, not such a difficult decision!

    Both kinds should not be entrusted with serious amounts of any kind of valuables or “money”!

    Why bequeath & swop (‘TRUST’) = valuable & tangible currencies like Dollars, Pounds, or Euros (= having an economic base) into an Illusion like plastic Casino chips of any imagination- believing to get rich quickly?

    The penalty is a rude awakening, an empty bank account and a go-back to begin! Why not play Malefiz instead?


  2. avatar

    Claro que a moeda digital é o futuro mas tem que ser regulado pelas autoridades financeiras, e com suporte do Estado.

  3. avatar

    Hope you are sitting down because this may shock you, but so-called digital currencies (e.g. cryptos) are ponzi schemes.

  4. avatar

    Digital ,,currencies” have never been the future of money. It’s just the biggest Ponzi Scheme ever invented.

  5. avatar

    Digital currancy can be a trap to loose money!
    I also don’t think that it is a good idea to reduce someones savings just digitally in numbers.
    The hackers love this system, much easy to manipulate it!

  6. avatar

    This crypto currency is a fraud and a scam. This is criminal.

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