Christoph Boschan is unlikely to become a convinced Bitcoin investor anytime soon. Most recently, the head of the Vienna Stock Exchange compared the Bitcoin hype with the tulip mania and attested a crash as soon as BTC was regulated as a currency or financial instrument. In an interview with BTC-ECHO, Boschan wants to clarify the question: Is there a threat of an exchange rate collapse?

In an interview with Die Presse , Christoph Boschan hit a low blow a few days ago: Bitcoin is “vastly inferior to any alternative course of action” and shows similarities with “the tulip mania”. He rounded off the criticism with the ironic formulation that Bitcoin was after all “extremely important for criminal payments”. The criticism again made waves in the crypto space. However, if the statements are straightened out a bit, an existing basic Bitcoin problem becomes apparent.

Bitcoin: a matter of regulation

Opinions are divided on Bitcoin, not only among investors but also among regulators. There is still no common European legislation that creates a binding framework for crypto values. Crypto regulation is a country issue. The EU Regulation on  Markets in Crypto Assets  (MiCA) is still in draft status .

Germany, on the other hand, has a special role in European comparison. Since 2020, crypto values, including Bitcoin, have been included as financial instruments in the German Banking Act . In contrast to the MiCA draft, which provides for a separate division of tokens, e-money tokens, utility tokens and other crypto values, German legislation tries to create a uniform framework.

In Austria, however, Bitcoin is classified neither as a currency nor a financial instrument, but as a property right. This is “the great stroke of luck for Bitcoin” and “ultimately an expression of our liberal economic order”, as Christoph Boschan explains

Bitcoin is currently classified as a property right rather than a currency or financial instrument. It cannot be otherwise, because if it were classified as a currency its existence would simply not be permitted, its issuance and use would be forbidden and prosecuted in many cases – Articles 16 and 128 of our EU treaty only give the ECB the right to issue a currency.

Christoph Boschan

According to the CEO of the Vienna Stock Exchange, the regulatory status can be reduced to the following formula: “The moment BTC is identified as a currency, it disappears legally”. A supposedly sensational thesis that may lure crypto enthusiasts out of the reserve, but according to Boschan only reflects the “current legal situation”. After all, Bitcoin cannot be classified as a currency, since the “house right” for the issue of currencies lies with the EU.

Ripple precedent

According to Boschan, the same applies “to regulation as a financial instrument”. Finally, the example of Ripple shows “what it means to be viewed as a financial instrument”. In December last year, the US Securities and Exchange Commission (SEC) declared the Ripple currency XRP a security token, which resulted in a legal dispute with the Californian FinTech.

But this example shows that the legal situation for the token economy is anything but clear. Contrary to the attitude of the SEC, XRP is not classified as a security in other jurisdictions, but as a utility token. In addition, it is unclear whether the SEC is right with its move. Ultimately, the competent courts will decide on the regulatory status. The precedent Ripple shows: crypto assets and regulation are still in the discovery phase.

Bitcoin regulation shows gaps

The blanket criticism that the Vienna Stock Exchange boss unloads representative of supposedly Bitcoin-skeptical stock exchange representatives may be understandable from a crypto investor’s point of view, but it is not more correct. Statements such as: “If you regulate Bitcoin like a currency or a financial instrument, then it is no longer worth anything”, should be understood less as a rejection or attack on Bitcoin and the financial infrastructure behind it, and rather as a pointer to a lack of regulations.

As a manager, however, I can conclude with astonishment that the BTC industry is looking for such proximity to “currencies” or “financial instruments” and that this is the basis for sales. This is not strategically smart, but rather toxic, because the other way around it becomes a shoe, both – both the identification as a currency and as a financial instrument – are the greatest Achilles heels of the value of Bitcoin.

Christoph Boschan

Ultimately, however, it depends on the design of the legal framework. After all, Bitcoin is classified as a financial instrument in Germany, but it has not lost its value.

A common misconception?

A few friends from the crypto environment are likely to have Boschan also made the statement that Bitcoin is a vehicle for illegal purposes. According to Boschan, this view is derived from “very simple observation from the reality of life”. Whenever the Vienna Stock Exchange is exposed to blackmailing cyberattacks, “the payment requests come exclusively in BTC, […] not in euros, not in dollars, not in yen, not in gold, not in stocks, bonds or other derivatives, all of which are digital would be even smoother ”.

Obviously, the criminals use the most obvious instrument for them.

Christoph Boschan

As is so often the case, the devil is in the details. Wanting to push Bitcoin and Co. into the corner of a shadow currency, which is primarily used by criminals, belongs in the realm of fables . As the blockchain analysis company Chainalysis outlines in the current 2021 Crime Report , only a small fraction of 0.34 percent of all crypto transactions were for illegal purposes in 2020. Compared to the previous year, the criminal crypto cash flows have decreased by almost 2 percent, “the crime related to cryptocurrencies has decreased significantly in 2020”.

However, what is generally true of illegal crypto transactions is not particularly true of ransomware attacks. According to the report, “the total amount paid by ransomware victims has increased by 311 percent this year”. Accordingly, “no other category of cryptocurrency-based crime has had a higher growth rate”. According to Chainalysis, 2020 is not only the Covid year, but also “the year ransomware exploded”.

Bitcoin economy wins through exchange

In this light, Boschan’s remarks seem to be a very sober confirmation of the increase in ransomware identified by Chainalysis. So the Vienna Stock Exchange CEO finally defends himself against the attempt to put him “across the board in the anti-crypto corner”. Because the opposite is ultimately the case:

As an infrastructure provider whose foundation is databases, we are extremely attentive and very open-minded about developments relating to distributed database infrastructures. We have dozens of initiatives behind us and we certainly share the fascination that can trigger.

Christoph Boschan

Against this background, the Bitcoin-critical tones are already losing their explosive power. Boschan’s statements can certainly be read as a call to action to embed the crypto market in clear regulations. Ultimately, this creates the basis for sustainable growth in the industry, on which a wide variety of service providers are based. In the long term, the Bitcoin economy can only benefit from an unbiased discourse with traditional financial market players.