Illustrations of Bitcoins. Photo: Reuters/Dado Ruvic
Illustrations of Bitcoins. Photo: Reuters/Dado Ruvic

Austria’s central bank chief and ECB governing council member Ewald Nowotny weighed in on bitcoin Wednesday, labelling the cryptocurrency a tool for money laundering.

“One ought to apply what the basic rule is in any other financial transaction: everyone involved should reveal their identity,” Nowotny was quoted by the Daily Mail as telling German daily Sueddeutsche Zeitung.

“We need a value-added tax on bitcoin, since it’s not a currency,” he added.

“It can’t be allowed that we’ve just decided to stop printing 500-euro notes to fight money laundering, that we’ve slapped strict rules on every tiny savings club, and then have to watch people blithely laundering money around the globe with bitcoin,” the central bank chief protested.

The comments come after ECB executive board member Benoit Coeure expressed similar concerns in an interview with Caixin Global last month.

“Bitcoin is not a currency. Investors should not believe that they will be able to use it as a means of payment. It is a speculative investment,” Benoit warned. “There is a risk of large capital losses which investors should be aware of.”

“So the main concern related to Bitcoin is not a monetary one but one that relates to investor protection, and possibly also to tax evasion, money laundering and criminal finance,” he said, echoing Nowtny’s concerns.

Despite the concerns from central bankers, which is nothing new, reports that Founders Fund, co-founded by Peter Thiel, has poured some US$15 to US$20 million into the cryptocurrency have sparked a bit of a rebound this week after a big drop to end last year.

Coinbase is quoting a price Wednesday afternoon above US$15,000, after bitcoin fell to less than US$13,500 late last month from a high above US$19,000.

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