Faster Payments

ECB Says Real-Time Payments Are Banks’ Bitcoin Foil

A European Central Bank (ECB) director urged banks on Thursday (Nov. 30) to speed up the launch of instant payments to push back against cryptocurrencies like bitcoin.

According to news from Reuters, a member of the ECB’s executive board, Yves Mersch, said commercial banks need to provide an alternative to bitcoin, which is surging in popularity: Its stock price recently blew past $11,000. At the start of the year, it was trading around $1,000.

“Banks need to implement instant payments as soon as possible and provide an alternative narrative to the ongoing public debate on the alleged innovation brought by virtual currency schemes,” he said during an event in Rome. According to Mersch, the ECB said it would experiment with cash on different digital technologies but didn’t see it engaging in “adventurous applications” of the technology.

The comments on the part of the ECB director come as other high-profile figures have been railing against cryptocurrency in general, and bitcoin in particular.  Joseph Stiglitz, an economist who won the Nobel Prize in 2001 has called for bitcoin to be outlawed. During an interview on Bloomberg television, which was covered by American Banker, Stiglitz said that bitcoin is successful because of a lack of regulation. “So, it seems to me it ought to be outlawed,” he said. “It doesn’t serve any socially useful function.” He noted that bitcoin is a bubble that is going to “give a lot of people a lot of exciting times as it rides up and then goes down.”

Meanwhile, earlier this month in an interview with CNBC, Goldman Sachs CEO Lloyd Blankfein said that “maybe bitcoin is a kind of a bubble,” adding: “I don’t like it. I’m not comfortable with it. I’m kind of an old dog to be absorbing that kind of a new trick.”

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