ACCORDING TO BNP PARIBAS, ABSENCE OF CENTRAL BANK WILL LIMIT BITCOINS FUTURE

Bitcoin, the pioneer of cryptocurrencies, has captivated the world with its decentralized nature and potential to disrupt traditional financial systems.As Bitcoin's popularity surged, numerous voices, both supportive and critical, have weighed in on its long-term viability. Follow the news and highlights of the BNP Paribas Group. Find out more about our expertise, business lines and solutions, as well as our strategy and governance. Create an email alertRecently, BNP Paribas, a leading global financial institution, added its perspective to the conversation.According to a report, BNP Paribas believes that the absence of a central bank as a ""lender of last resort"" poses a significant limitation to Bitcoin's future.This concern, rooted in the potential for financial instability during crises, has sparked debate within the crypto community. BNP Paribas, a leading private bank in the Eurozone, is entering the custody space for bitcoin and other cryptocurrencies. The bank will partner with Metaco, a Swiss digital asset custody firm who has existing banking partnerships to bridge existing infrastructure. Fireblocks will host a hot walletIs the lack of a central authority a fatal flaw, or does Bitcoin's inherent design provide sufficient safeguards? BNP Paribas' primary concern is that in case of a financial crisis (like ), there is no central authority to regulate the products based on Bitcoin.This article will delve into BNP Paribas's argument, exploring the implications of a decentralized system without a traditional safety net and examining the counterarguments put forth by Bitcoin proponents.We'll analyze the role of central banks in traditional finance, investigate how Bitcoin addresses liquidity crunches, and assess the future trajectory of this groundbreaking digital asset.

BNP Paribas's Concerns About Bitcoin's Decentralized Nature

BNP Paribas's primary concern stems from the absence of a central authority to regulate Bitcoin-based products and provide liquidity during financial crises.In essence, they question who will bail out the Bitcoin ecosystem if it faces a severe liquidity crunch, similar to the role central banks play in traditional finance.

The bank highlights the importance of a lender of last resort, typically a central bank, in maintaining financial stability. BNP Paribas has been doing business in the United States for over 140 years. Headquartered in New York, with four business centres and 536 retail locations in 23 states, the bank relies on its strong and well-established franchise to provide full-service institutional corporate and investment banking, including cash management and international trade finance, and to offer a broad range ofThese institutions inject liquidity into markets when they dry up, preventing systemic failures and protecting consumers.Without such an entity, BNP Paribas argues, Bitcoin is vulnerable to significant risks that could undermine its long-term viability.

This concern isn't entirely new.Bitcoin has faced criticism on various fronts, including its use in illicit activities and its speculative nature. Bitcoin has been attacked for various reasons in the past - usage in crime, speculative bubble, etc. BNP Paribas has joined the chorus, saying that Bitcoin has been attacked for various reasons in the past - usage in crime, speculative bubble, etc. BNP Paribas has joined the chorus, saying that Bitcoin's future is limited because there is noThe lack of a central bank adds another dimension to these concerns, raising questions about its resilience in the face of severe market stress.

The Role of Central Banks in Traditional Finance

Central banks play a crucial role in modern economies, acting as guardians of financial stability and implementing monetary policy. 近期法国巴黎银行（BNP Paribas）也加入了这一阵营，他们认为比特币的未来发展是有限的，因为 最终贷款人 [1]是不存在的。 bitcoin 据报道，该银行认为比特币的未来前景是有限的，主要是因为最终贷款人的缺失。Their key functions include:

• Issuing Currency: Central banks are responsible for issuing and managing a nation's currency.
• Controlling Monetary Policy: They influence interest rates and the money supply to manage inflation and promote economic growth.
• Supervising Banks: Central banks oversee and regulate commercial banks to ensure their stability and soundness.
• Lender of Last Resort: They provide emergency loans to banks and financial institutions during times of crisis to prevent systemic failures.

The lender-of-last-resort function is particularly relevant to BNP Paribas's argument.During periods of market turmoil, when liquidity dries up and financial institutions face solvency issues, central banks step in to provide crucial funding. The US has seized at least 215,000 Bitcoins, valued at almost $21bn at current prices, since 2025, according to an analysis by crypto firm 21.co. (Central Bank Digital Currency), CelenteThis intervention helps to stabilize the financial system and prevent widespread panic.

For example, during the 2008 financial crisis, central banks around the world injected massive amounts of liquidity into the financial system to prevent a complete collapse. 482 subscribers in the digitalbanking community. Digital banking is more and more important for banks. Omnichannel, video banking, branchThis intervention, while controversial, is widely credited with averting an even more severe economic downturn.

Bitcoin's Response to Liquidity Challenges: A Decentralized Approach

Bitcoin operates on a fundamentally different model than traditional financial systems. French Bank BNP Paribas (BNP.PA) is entering the crypto custody space via a partnership with Swiss digital asset safekeeping firm Metaco, according to three people with knowledge of the deal.It is decentralized, meaning it is not controlled by any single entity, including a central bank.This decentralization is both its strength and, according to BNP Paribas, its weakness.

So, how does Bitcoin address the potential for liquidity crunches without a central bank?

• Decentralized Exchanges (DEXs): DEXs allow users to trade Bitcoin and other cryptocurrencies directly with each other, without the need for intermediaries.This can help to maintain liquidity during periods of market stress.
• Algorithmic Stablecoins: These cryptocurrencies are designed to maintain a stable value, often pegged to the US dollar.They can provide a source of liquidity and stability within the Bitcoin ecosystem.
• Layer-2 Solutions: Technologies like the Lightning Network enable faster and cheaper Bitcoin transactions, improving liquidity and scalability.

However, the effectiveness of these mechanisms during a severe financial crisis is still untested. 比特幣曾因多種理由遭到攻擊 在犯罪活動中的應用、投機泡沫等等。近期法國巴黎銀行（BNP Paribas）也加入了這一陣營，他們認為比特幣的未來發展是有限的，因為「最終貸款人」[1]是不存在的。據報道，該銀行認為比特幣的未來前景是有限的，主要是因為最終貸款人的缺失。While DEXs and stablecoins have grown in popularity, they are not immune to market volatility and potential failures.Layer-2 solutions are still under development and may not be able to handle a massive surge in transaction volume during a crisis.

Examples of Past Bitcoin Market Stress

Bitcoin has experienced several significant price crashes throughout its history, often triggered by regulatory concerns, exchange hacks, or market manipulation. See full list on investopedia.comWhile these events have caused considerable pain for investors, they have not led to a complete collapse of the Bitcoin network.

For instance, the COVID-19 pandemic in early 2020 triggered a sharp sell-off in global markets, including Bitcoin.However, Bitcoin quickly recovered and went on to reach new all-time highs in the following months. Central Banks New Realities: Regulating the Rise of Bitcoin. The growing volume of central bank research on Bitcoin suggests that these institutions are recognizing its influence. These studies, while not directly driving policy yet, indicate that Bitcoin is gaining serious attention among policymakers.This resilience suggests that Bitcoin may be more robust than some critics believe.

The Rise of Central Bank Digital Currencies (CBDCs)

Interestingly, the very concerns raised by BNP Paribas about the absence of a central bank in the Bitcoin ecosystem are also driving the development of Central Bank Digital Currencies (CBDCs). According to BNP Paribas, Absence of Central Bank Will Limit Bitcoin's FutureThese digital currencies, issued and controlled by central banks, aim to combine the benefits of digital assets with the stability and oversight of traditional finance.

The growing interest in CBDCs highlights the recognition among policymakers of the increasing influence of digital currencies. What does BNP Paribas do for the ecological transition and inclusion? At the beginning of 2025, several actors in the banking and insurance sectors announced the creation of a societal or ecological dividends, dedicating part of their results and profits to environmental, solidarity and prevention projects, creating an opportunity to take a closer look at some of BNP Paribas related actionsCentral bank research on Bitcoin is growing, suggesting that these institutions are taking it seriously, even if they are not directly driving policy yet.

CBDCs could potentially address some of the concerns raised by BNP Paribas by providing a digital form of central bank money that can be used to settle transactions and provide liquidity during crises.However, they also raise concerns about privacy and government control.

BNP Paribas's Investment in Bitcoin ETFs: A Contradiction?

Adding an interesting layer to the debate, despite their concerns about the lack of a central bank, BNP Paribas has recently invested in Bitcoin ETFs.According to 13F filings with the SEC, BNP Paribas purchased shares in BlackRock's iShares Bitcoin Trust ETF (IBIT) in the first quarter of 2025.

This move suggests a nuanced view on Bitcoin. 比特币曾因多种理由遭到攻击 在犯罪活动中的应用、投机泡沫等等。近期法国巴黎银行（BNP Paribas）也加入了这一阵营，他们认为比特币的未来发展是有限的，因为 最终贷款人 [1]是不存在的。据报道，该银行认为比特币的未来前景是有限的，主要是因为最终贷款人的缺失。While the bank may have reservations about its long-term viability in its current form, it also recognizes its potential as an investment asset.The investment, while relatively small, represents a significant step for a traditional financial institution towards embracing Bitcoin.

This investment could be interpreted in several ways:

• Diversification: BNP Paribas may be seeking to diversify its portfolio by including Bitcoin, recognizing its potential for high returns.
• Client Demand: The bank may be responding to growing demand from its clients for exposure to Bitcoin.
• Strategic Positioning: BNP Paribas may be positioning itself to capitalize on the growth of the Bitcoin market, even if it has concerns about its long-term sustainability.

The Future of Bitcoin: A Decentralized Revolution or a Limited Experiment?

The question of whether the absence of a central bank will ultimately limit Bitcoin's future remains open. BNP Paribas and Deutsche Bank complete the transfer of Global Prime Finance Electronic Equities to BNP Paribas. BNP Paribas and Deutsche Bank announce that the transfer of clients, technology and key staff from Deutsche Bank s Global Prime Finance and Electronic Equities businesses to BNP Paribas has been successfully completed by the end of 2025, in line with the targeted timeline.BNP Paribas's concerns are valid and highlight the potential challenges faced by a decentralized system without a traditional safety net.However, Bitcoin proponents argue that its inherent design provides sufficient safeguards and that its resilience in the face of past crises demonstrates its robustness.

Several factors will influence Bitcoin's future trajectory:

• Regulatory Developments: The regulatory landscape surrounding Bitcoin is still evolving.Clear and consistent regulations could provide greater certainty and foster institutional adoption.
• Technological Advancements: Continued innovation in areas like layer-2 solutions and decentralized finance (DeFi) could improve Bitcoin's scalability and liquidity.
• Adoption Rate: The widespread adoption of Bitcoin by individuals and businesses will be crucial for its long-term success.
• The Success of CBDCs: The emergence of CBDCs could either complement or compete with Bitcoin, depending on their design and implementation.

It's important to consider that while BNP Paribas expresses concerns, the bank is also actively engaging with the cryptocurrency space through custody solutions and ETF investments.This suggests a pragmatic approach, acknowledging the evolving landscape of finance and the increasing importance of digital assets.

Conclusion: Navigating the Uncertain Future of Bitcoin

The debate surrounding Bitcoin's future is far from settled.BNP Paribas's perspective, highlighting the lack of a central bank as a potential limitation, adds a valuable dimension to the discussion.The absence of a lender of last resort raises legitimate concerns about financial stability during crises.However, Bitcoin's decentralized nature and ongoing technological advancements offer potential solutions to these challenges.Ultimately, the future of Bitcoin will depend on its ability to adapt to evolving regulatory landscapes, foster innovation, and achieve widespread adoption.

Key takeaways:

• BNP Paribas believes the absence of a central bank limits Bitcoin's future due to the lack of a lender of last resort.
• Central banks play a crucial role in maintaining financial stability by providing liquidity during crises.
• Bitcoin addresses liquidity challenges through decentralized exchanges, algorithmic stablecoins, and layer-2 solutions.
• The emergence of CBDCs could potentially address some of the concerns raised by BNP Paribas.
• Despite their concerns, BNP Paribas has invested in Bitcoin ETFs, suggesting a nuanced view on its potential as an investment asset.

The future of Bitcoin is uncertain, but its impact on the financial world is undeniable. BNP Paribas, the second largest European bank, has purchased exposure to Bitcoin via a spot ETF, per recent 13F filings with the SEC. The filings show BNP Paribas bought BlackRock s iShares Bitcoin Trust ETF (IBIT). JUST IN: 🇫🇷 Second largest European bank, BNP Paribas reports exposure to Bitcoin ETF in 13F filings.As technology continues to evolve, and regulation adapts, we'll see if Bitcoin can overcome the challenges and fulfill its potential as a truly decentralized global currency.