At the Economics of Payments IX conference in November 2018, European Central Bank (ECB) executive board member Benoît Cœuré described Bitcoin as "the evil spawn of the financial crisis."
Cœuré's remarks, in unison with Bank of International Settlements (BIS) general manager Agustín Carstens' statement that Bitcoin is "a combination of a bubble, a Ponzi scheme and an environmental disaster," confirmed what bitcoiners already knew: Bitcoin is a thorn in the side of central banks, drilling deeper into the flesh of legacy monetary policymakers as it gains traction and supporters around the world.
Bitcoin is a "clever" idea, Cœuré elaborated in his speech, but "sadly, not every clever idea is a good idea."
Unsurprisingly, reactions from businesses and professionals in Bitcoin's surrounding industry were amused at best.
Especially this year, involvement by major financial institutions has pushed Bitcoin's validation on the world stage.
By the time public companies like MicroStrategy and Square allocated sizeable portions of their portfolios to Bitcoin, citing its characteristics as a hedge against inflation, a narrative shift had already begun across leading finance and business media outlets, and 2020 had officially become the year that kicked off institutional adoption as accredited investors poured millions into the ecosystem.
The commercial banking sector, too, has taken notice of Bitcoin: J.P. Morgan has completed a 180-degree turn on Bitcoin since 2017, when CEO Jamie Dimon called the asset a "fraud"—now, the bank describes Bitcoin as an alternative form of gold preferred by millennials.
In late October, leading Southeast Asia bank DBS published a page on its website detailing an upcoming cryptocurrency exchange targeted at institutional clients. While it quickly turned out the release had been accidental and the bank is still working on the necessary regulatory approvals, it further showed that financial institutions don't want to be sleeping on Bitcoin.
While much has happened in the Bitcoin ecosystem since late 2018, one might come to think that little has been achieved with regards to a much-discussed central bank digital currency (CBDC) for the eurozone.
In his talk in 2018, Cœuré stressed the potential behind CBDCs and noted that while multiple central banks around the world were conducting research into the field, for most countries, "there is more time to continue studying the technology and to assess the implications" of a central bank-issued digital currency.
So far, the ECB has published a number of reports and a survey on the potential issuance of a digital euro—tangible progress, however, still seems far off. This throws Europe far behind China, which is in the middle of a pilot program for its digital currency named DC/EP (digital currency/electronic payment), and Sweden, which took matters into its own hands and has launched a pilot for the e-krona.
Meanwhile, the "evil spawn of the financial crisis" continues to look like a clever idea—and a good one, too.
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