A chief French academic and central bank policymaker has named Bitcoin (BTC) a “myth” and a “pseudo-currency,” and released the token’s possibilities of maturing money in the future, alleging that it neglects to reach the standards currently satisfied by fiat.
The allegations were presented in a document issued by the Banque de France, the country’s central bank. The document was authored by Christian Pfister, an associate professor of economics and cryptocurrencies at the renowned Pantheon-Sorbonne University.
Pfister is also the director-general of the central bank’s Financial Stability and Operations department. Pfister is considered one of the chief architects of the Banque de France’s central bank digital currency (CBDC) policy, which he also discusses in the document.
Pfister is generally uninterested in bitcoin’s possibilities of long-term success, claiming that “first-generation” tokens like BTC are part of a “search for a myth.” He insists that bitcoin is fundamentally used to make “speculative investments” and for “carrying out payment transactions under a pseudonym, which helps to protect privacy but also facilitates the financing of illicit activities.”
Quoting a study published in The Review of Financial Studies late-year echoes the claim that “an estimated quarter of the total number of bitcoin transactions, and nearly half in terms of value, are thought to be linked to illegal activities.”
He also says that BTC is used to transfer funds abroad, but adds,
“The downside for users, however, is that the associated fees are difficult to evaluate ex-ante due to price volatility in both legs of the transaction. The infrastructure may also become congested as it is ill-equipped to process mass payments.”
And like many before him, he rolls out the right that bitcoin disappoints on all three counts to meet the three requirements of money as determined by classical economic theorists.
“Overall, bitcoin does not fulfill, or only partially fulfills the three functions of money. It is not a unit of account (it is rarely if ever used to price goods and services, in particular, labor and capital), nor is it a payment instrument (very few purchases of goods and services are settled in bitcoin), or a store of value (its exchange rate against other currencies, and hence its value in terms of goods and services, is too volatile).”