Prosecutors allege the F1 chief executive paid Gerhard Gribkowsky so the banker would agree to sell the sport's commercial rights to his preferred buyer and retain power.
But Ecclestone, 83, said he paid the millions because Gribkowsky was alluding to alerting the British tax authorities about his personal affairs.
First, the diminutive Briton testified on Tuesday, Gribkowsky was pressuring him to invest a whopping $250 million in a joint real estate business.
"I told him that I was not interested," Ecclestone said.
But then Ecclestone, who said Gribkowsky's constant pressure made him "a little nervous", made a counter-offer.
"I asked him: how much do you need to do what you want to do, but don't push it.
"I was a bit sarcastic when I asked him if 50 million would help," he testified.
"It was the cheapest insurance policy I have ever seen."
However, he said he would not necessarily describe Gribkowsky's actions as "extortion".
"That is a very serious allegation," said Ecclestone.
But he said Gribkowsky's actions were giving him pause to fear a tax investigation that could cost him billions.
"I would not have had the money to pay two billion pounds," he said. "I would have been bankrupt and without a wristwatch at the age of 76."