Joachim Nagel advocates for a digital euro to strengthen Europe’s financial independence and diminish reliance on payment solutions originating from the US.
Germany’s central bank president, Joachim Nagel, has restated his concerns regarding Bitcoin, deeming it inappropriate for central bank reserves. During a presentation at the London School of Economics, Nagel contended that Bitcoin does not qualify as a true currency but is merely an asset class characterized by a lack of liquidity and security. He also criticized the pro-cryptocurrency views of former US President Donald Trump, especially the idea of creating a strategic Bitcoin reserve. In his remarks, he compared Bitcoin to the Dutch Tulip Mania of the 17th century, cautioning against its speculative tendencies and inherent volatility.
Conversely, Nagel is a robust supporter of the digital euro, emphasizing its capacity to enhance Europe’s financial sovereignty. He warned that dependency on private sector payment solutions, particularly those from American companies, might expose Europe to geopolitical vulnerabilities. Although the long-term impacts of central bank digital currencies (CBDCs) on interest rates are still unknown, he stressed their significance in maintaining a robust financial system.
Meanwhile, the United States is modifying its regulatory stance on cryptocurrency. Under the leadership of Acting SEC Chair Mark Uyeda, new regulations have permitted banks to re-enter the crypto custody market. The SEC has recently revised its restrictive guidance, enabling regulated financial institutions to manage digital assets. As these changes progress, Bitcoin is presently trading at $96,318, reflecting a slight decrease over the past week.
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