Commerzbank embarrasses itself with anti-Bitcoin letter

Februar 25, 2021

Commerzbank disgraces itself with anti-Bitcoin letter

Crypto-scepticism is a tradition in the banking sector. Commerzbank is sticking to this tradition and reveals one thing in particular in an „Insight Report“: gaps in education.

Bitcoin and Commerzbank are unlikely to get off on the right foot any time soon. In an „Insight Report“, the major bank presents its critical view of the asset and reveals some gaps in its knowledge. The prejudices are the same old ones: Bitcoin is used for money laundering, has no intrinsic Crypto Engine value and the crypto market shows parallels to the tulip mania.

Commerzbank dissects Bitcoin

Bitcoin is not money: this is the damning verdict of the report „Precious Metals vs. Cryptocurrencies“, which voices the same concerns that have been heard since the beginning of the Bitcoin Blockchain. Even if Commerzbank makes the right arguments, the core statement of the report misses the reality.

The report suggests that Bitcoin is a shadow currency that opens the door to money laundering and terrorist financing. The underlying blockchain technology is „completely anonymous, with all its advantages and disadvantages“. A still widespread fallacy: Blockchain technology is not anonymous, but pseudonymous.

All transactions are visible to all network participants at all times. The Bitcoin Blockchain is a transparent database in which money flows can be traced – even for law enforcement agencies. KYC procedures make it easy to trace illegal money flows back to the originator. Even if criminals can take a diversion via Mixer or privacy coins like Monero, the crypto ecosystem is not the black hole it is often portrayed as. If one wants to find a scapegoat, fiat money remains the most popular money laundering vehicle.

Bitcoin without „ideal value“?

Commerzbank sees another point of criticism in the alleged misrepresentation of Bitcoin as a digital gold version. Due to the corona-induced „ultra-expansive monetary policy“, investors are fleeing to safe havens to protect themselves against inflation. Bitcoin, however, does not live up to this status, as it lacks „the use value and also the ideal value“.

The precious metal, on the other hand, has „always had a high sentimental value“, which is due to the fact that „gold cannot be multiplied at will and its extraction is associated with corresponding extraction costs“. The thesis that Bitcoin has no sentimental value is all the more remarkable in view of this conclusion, since the same premises also apply to Bitcoin. After all, the mining costs for Bitcoin are reflected in the proof-of-work process and can be measured in terms of the computing power expended.