The director general and advisor of the ECB of the institution noted that banks risked incurring long-term reputational damages for promoting Bitcoin despite the short-term profits they could make. The bank warned that a further plunge by BTC would harm customer relations and trigger reputational damage to the entire industry.

“Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimized,” wrote the bank.

The bank further argued that, unlike real estate, Bitcoin could not generate flow or be used productively like commodities; hence, it was unsuitable as an investment. As per the bank, “The market valuation of Bitcoin is therefore based purely on speculation.”