By Susie Violet Ward · Forbes · 22 October 2024
A European Central Bank working paper, The Distributional Consequences of Bitcoin by Ulrich Bindseil and Jürgen Schaaf, argues that bitcoin’s price appreciation widens wealth gaps by benefiting early adopters at the expense of latecomers. It describes bitcoin as a speculative asset with little productive contribution and presents central bank digital currencies as a preferable alternative.
Dr Murray A. Rudd, Allen Farrington and Dennis Porter published a rebuttal challenging what they described as flaws and biases in the paper. They argued that it fails to distinguish bitcoin from the wider crypto market, overlooks its use by activists and for remittances, and misreads wealth concentration because many of the largest wallets belong to exchanges holding funds for millions of users. Porter says CBDCs can never be as inclusive as bitcoin, and the rebuttal raises concerns about the surveillance risks of CBDCs.