The apparent stability of the price of Bitcoin (BTC) in the months before the FTX crash was “an intentionally generated final gasp before the road to irrelevance.” Furthermore, the consequences of the crypto exchange, which pushed BTC to a two-year low of under $16,000 last week, were “already anticipated” according to the European Central Bank (ECB).

Ulrich Bindseil, Director General of Market Infrastructure and Payments at the ECB, and adviser Jürgen Schaff claim in a blog post that “Bitcoin’s conceptual design and technical flaws render it doubtful as a method of payment.”

Bitcoin transactions are “cumbersome, sluggish, and costly,” according to Bindseil and Schaff, which explains why the world’s biggest cryptocurrency — created to replace the current monetary and financial system — “has never been employed to any major amount for lawful real-world transactions.”

Bitcoin “should not even be validated.”

The writers also linked Bitcoin’s past price cycles to speculative bubbles, which are fueled by fresh money. “Bitcoin has also benefitted from waves of fresh investors on several occasions.” “The manipulations by specific exchanges or stablecoin suppliers, etc., during the early waves have been widely documented,” the site says.

Bindseil and Schaff went on to say that since Bitcoin is neither a payment system nor a type of investment, it “should be recognized as neither in regulatory terms and so should not be legitimized.”

“Similarly, the financial sector should be careful of the long-term impact of pushing Bitcoin investments, despite the short-term gains they may earn (even without having skin in the game),” the blog writes, alluding to reputational issues for financial institutions.

Notably, today’s blog post was published the day after Brazil, the world’s seventh most populated nation, legalized the use of cryptocurrencies such as Bitcoin as a form of payment.

Bindseil, the study’s co-author, has previously published many research papers on CBDCs, which is an abbreviation for a central bank’s digital currencies — digital equivalents of a state’s fiat currency.

The European Central Bank (ECB) is actively involved in the development of the digital euro, with president Christine Lagarde noting that a European CBDC may supplement conventional currency and “offer an alternative to private digital currencies” such as Bitcoin.

CBDCs may also help cut bank interest rates, make transactions easier and quicker, and reduce cash usage, according to an ECB study last year.

On the other hand, many cryptocurrency supporters claim that CBDCs pose substantial hazards, including the loss of financial privacy, greater monitoring of people, and the power to prohibit or censor any transaction. What about you? Do you think CBDC could replace bitcoin? Please let me know! thank you!