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The onshore yuan closed at 6.6916 against the US dollar at 16:30 on October 15, up 9 points from the previous trading day.The Russian Ministry of Defense reported that last night, Kyiv attempted a large-scale attack on an oil refinery in Ryazan. Russian forces intercepted and destroyed four long-range Flamingo cruise missiles and 69 drones.On October 15th, European Central Bank (ECB) Governing Council member Kazakowski stated that, faced with multiple conflicting forces in the global economy, the ECB has the time to analyze inflation trends without immediately taking interest rate action. In an interview, the Latvian central bank governor pointed out that continued rises in oil and gas prices are expected to keep consumer price increases high, but the recent sell-off in government bonds may also begin to dampen economic activity. Kazakowski, who is attending the IMF annual meetings in Bangkok, Thailand, said, “My feeling is that inflationary pressures will continue to prevail in the short term. Therefore, the direction of monetary policy is clear, even if there is no need to rush to adjust interest rates at present. We are not behind the times, and in that sense, we are in a favorable position.” Kazakowski emphasized that the upside risks to inflation “still outweigh the downside risks to economic growth.” However, he noted that the threats to economic growth “may exhibit a more pronounced non-linear characteristic.” He said, “The trade-offs facing monetary policy will become increasingly complex. So far, decisions have been relatively easy, but there is currently a great deal of uncertainty, and the predictability of future developments is very low.”On October 15th, former European Central Bank (ECB) President Mario Draghi stated that the ECB is unlikely to provide aid to France through market intervention in the short term. The former central bank governor, who led the Eurozones response to the sovereign debt crisis, said on Thursday that the Eurozone is still far from a repeat of that crisis, and the current economic environment means that the likelihood of the ECB intervening in France remains low. Speaking at an economic forum in New Delhi, Draghi said, "The threshold for intervention is very high." He pointed out that during the Eurozone debt crisis, the Eurozone faced more deflationary pressures, "or at least inflation was only slightly above zero." Now, "inflation is high and still rising. I think the ECBs primary task remains fulfilling its mandate to maintain price stability."Spanish Prime Minister Sánchez: We disagree with the current EU budget plan; it is insufficient.

ECB says Bitcoin is artificially propped up, shouldn’t be legitimised

Cory Russell

Dec 01, 2022 15:05

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The European Central Bank stated on Wednesday that Bitcoin is being artificially inflated and shouldn't be approved by authorities or financial institutions because it is more akin to gambling.


Various arguments have been made to support bitcoin and other cryptocurrencies as an alternate method of payment and a defense against the inflationary practices recently adopted by powerful central banks like the ECB.


However, a 75% decline over the previous year, which coincided with the emergence of inflation, as well as a number of scandals, including last month's collapse of the FTX exchange, have given detractors among central bankers and regulators ammo to fight back.


Bitcoin's value reached a high of around US$69,000 in November 2021 before dropping to about US$17,000 by mid-June 2022, where it is currently circling.


The ECB described the recent stabilization of bitcoin as "an artificially produced last gasp before the path to irrelevance" in a blog post that used unusually harsh language.

Ulrich Bindseil and Juergen Schaaf said that "big bitcoin investors have the strongest incentives to keep the frenzy alive." "At the end of 2020, a few small businesses started promoting bitcoin at their own expense. Some venture capital firms are still making significant investments.


They claimed that as of mid-July, venture capital investments in the cryptocurrency and blockchain industries had reached $17.9 billion, but they offered no proof of price manipulation.


Regulators from all across the world are developing regulations for the cryptocurrency industry, a complex ecosystem that includes financing activities that take place on the blockchain, the distributed ledger that powers stablecoins that are ostensibly backed by fiat money.


According to the ECB blog, regulations could be mistaken for acceptance.


Bitcoin should be recognized as neither in regulatory terms and should not be legitimized, according to Bindseil and Schaaf. "Bitcoin appears to be neither suitable as a payment system nor as a kind of investment," they stated.


Bindseil claimed in an email to Reuters that regulators will characterize cryptocurrencies as betting or gambling.


The blog's authors continued by saying that the engagement of banks, insurers, payment service providers, asset managers, and other financial institutions "suggests to small investors that investments in bitcoin are sound."


Despite any potential short-term gains, the blog's authors warned that the financial sector should be cautious of the long-term harm that could result from encouraging bitcoin investments.


Because it is the primary supervisor of banks in the euro zone and has influence over financial legislation in the EU, the ECB's statements are taken seriously.


The Market in Cryptoassets Regulation (MiCA), which is now being authorized by the EU, would likely need to be expanded in a subsequent version, which ECB President Christine Lagarde has dubbed "MiCA 2," she stated on Monday.


This was probably a reference to bitcoin, which is exempt from MiCA because it has no legal status in the EU and only trading platforms are covered by the regulations.


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