François Villeroy de Galhau, governor of the Banque de France, warned last Friday at a Beijing conference urgently against the use of Bitcoin. One should be aware that Bitcoin is in no way a currency, not even a cryptocurrency. Whoever deals with it, do so in the opinion of the Bank of France completely at their own risk.
According to Reuters news agency, Francois Villeroy de Galhau spoke at a Beijing conference on Bitcoin last Friday. The head of the French central bank urged his audience to stop trading in digital currencies.
It must be clear to everyone that this is not a currency and not even a cryptocurrency, according to the French bank manager.
“It is a speculative investment whose value is extremely unpredictable, based on no economic basis and (for the price fluctuations) no one is responsible.”
The Bank of France admonishes all those who want to invest in Bitcoin to do so entirely at their own risk, de Galhau says.
The Bitcoin just a niche?
Bundesbank board member Carl-Ludwig Thiele made a similar statement in a joint article with Martin Diehl in the journal Ifo-Schnelldienst. A cryptocurrency could not be a substitute for the euro or the dollar in their view. Bitcoin is not money, just a speculative object. You can not use virtual currency, but only exchange. Due to lack of value basis, the value could be extremely different up to total loss. Thiele and Diehl argue that the term currency goes back ethically to the word guarantee. Since the beginning, money has been about trust in its intrinsic value. Money must basically fulfill three functions. It serves as a means of payment, as a store of value and at the same time as a unit of calculation. Bitcoin fulfills so far
“None of the three monetary functions in economically relevant dimensions, because it does not extend beyond a niche and is extremely unstable value.”
Particularly susceptible to “parallel currencies and monetary competition” are central banks that would not keep the monetary value of their own currency stable.