European Central Bank executive board member Benoît Cœuré said that the blockchain is a promising innovation, while bitcoin is "the sinister product of the financial crisis."
Speaking at the Economic of Payments conference, Cœuré, who is also the chair of the Committee on Payments and Market Infrastructures at the Bank for International Settlements, drew attention to the growing popularity of cryptocurrency.
"In more ways than one, bitcoin is just the ominous product of the financial crisis, although he was an incredibly talented idea."
However, Cœuré high hopes for the blockchain technology underlying cryptocurrencies:
"Sadly, not all talented ideas can benefit. Blockchain has a huge number of features than is fundamentally different from bitcoin with its many problems. Agustín Carstens perfectly formulated all the shortcomings of bitcoin, calling it "a combination of a bubble, a Ponzi scheme and an environmental disaster." However, Central banks can still use the advantages of distributed ledger technology to begin issuing its own digital currency".
Some banks have already started studying the concept of central bank digital currencies. In addition, 69% of the Central banks in the near future we intend to explore ways to support the national currency systems by using digital currencies.
Benoît Cœuré noted that about 57% of Central banks, which are considering issuing digital currency, has identified two main options for their use. The first option is introduction of digital currency in transaction system with a high value such as interbank transfers, the second is their use as an everyday means of payment among the masses.
"Banks are confident that the central bank digital currencies can be used effectively for cross-border remittances. However, most Central banks agree that the central bank digital currencies are unlikely to be released over the next ten years. Even those four central banks that have indicated that they have reached the stage of developing a pilot project, are not yet ready for own digital currencies release."