Coinbase CEO shot down by ECB director over claim that crypto is real money

Should Bitcoin be considered real money? Thiago Prudencio/SOPA Images/LightRocket via Getty Images

The world, according to Coinbase, frames cryptocurrency in an unsurprisingly optimistic light: It is the “money of tomorrow”, a payment method that is more efficient, transparent and fair.

The problem is that some experts keep saying that crypto is not real money.

Speaking at the MoneyLive Summit in London, Coinbase’s head of business development for EMEA, Peter Stilwell, set out his vision for the asset.

Speaking to a gathering of Britain’s biggest names in the finance and banking industry, he claimed that crypto has all the characteristics of money.

Looking back at previous iterations of value exchange, from exchanging goods for valuables and then precious metals, before switching to paper and later plastic, he argued that networked payments are just the next frontier.

Using the example of Bitcoin, he told the audience that digital currency meets all his standards: fungibility, divisibility, scarcity, security and verification.

But as he finished his argument that crypto should be seen as real money, he was quickly shot down by the European Central Bank’s digital euro program director, Evelien Witlox, who was next on stage.

“In our view, cryptocurrencies are not money because there is nothing behind them,” she said. “We have a slightly different view than the previous speaker.”

She sought to draw a line between crypto and the potential digital euro, saying the latter was more stable with prices staying “roughly” the same over longer periods of time, as opposed to being subject to fluctuations.

Asked if the digital euro would make crypto obsolete, she added: “It’s not for us to say, but we think it’s important to have a very stable solution for people to pay with.”

Her sentiments are echoed by ECB President Christine Lagarde, who told Dutch TV last May that she is worried about people “who have no understanding of the risks, who want to lose everything and who will be terribly disappointed, and that’s why I think that should be regulated.”

Call for regulation

Like Lagarde, Witlox suggested that more people need to understand the risks surrounding crypto and that regulation is necessary.

Coinbase’s Stilwell agreed, saying a number of challenges still stand in the way of crypto becoming a major offering.

He explained: “We are going to need regulation to protect consumers while not stifling innovation. Events over the past 12 months have really exposed the need for clear, strong, enforceable regulatory frameworks and for the need for global coordination.

“It’s going to be very dangerous if we end up with a massive patchwork of regulatory requirements that stifles innovation and means that this – an inherently global product – is unable to flourish.”

Stilwell added that there are also “too many” people who still fall victim to scams.

Earlier this week, it was revealed that Coinbase is being sued for allegedly telling a man who claimed he lost $96,000 on the site to fraud that it wasn’t the company’s problem.

According to the filing, Ferguson’s account was wiped just hours after it was opened by a new device and from an IP address that had never been associated with his account.

A spokesperson for Coinbase told Fortune: “Coinbase also encourages customers to take measures to secure their personal accounts and information outside of Coinbase. We educate our customers on how to avoid cryptocurrency scams and report known scams to relevant law enforcement authorities.”

Stillwell continued: “As an industry, we must continue to invest in making sure consumers feel safe and comfortable engaging with cryptocurrencies, otherwise we will never truly reach widespread adoption.”