It does appear that Bitcoin and cryptocurrencies are getting something akin to mainstream adoption. Major banks are stepping in and are starting to offer crypto services to clients, and corporate institutions are dipping those first toes into the crypto waters. However, central banks especially are still spreading the fud, and are holding out for their CBDCs (central bank digital currencies) to overcome and squash the free people’s money that is crypto.
As Michael Sayler’s Microstrategy just announces the purchase of another 7000 bitcoin, bringing their total to 121,000 bitcoin, and the crypto market appears to have recovered from the new variant induced dip, all seems rosy for the future of cryptocurrency.
Internet users have now exceeded 4.6 billion, and of those, only around 77 million have a cryptocurrency wallet. Surely a huge pointer to the future growth of this sector around the world.
However, according to an article on GoBankingRates, a central bank currency will have a lot more impact. Kunal Sawhney, CEO of Kalkine Group stated the following:
“By regulating its supply through monetary policy maneuvers, central banks can inject or suck liquidity from the economy. During inflation, these institutions hike rates of borrowing and stop selling bonds — all denominated in USD. And with the GDP sliding, they cut rates and sell bonds. Simple and period, none of this can be done with blockchain-based digital currencies.”
What the CEO doesn’t state is that all this utility is for the control of centralised fiat currencies. Cryptocurrencies certainly cannot do these things, and are not built with this in mind at all.
In the article it argues the case for crypto as the potential “gold killer”. It looks at how the deflationary nature of Bitcoin makes it a store of value like gold. However, it doesn’t state how Bitcoin is truly deflationary - given its 21 million limit, or how gold has around 2% inflation due to the new supply coming out of the ground each year.
Instead, the author argues for the “tangibility” of gold, and that the complex coding that goes behind Bitcoin’s mining mechanism is actually a problem - without stating why?
The article finally quotes a merchant banker who appears to be in the know on why cryptocurrencies won’t work. He states:
“Ultimately, you need to continually exert effort to keep a cryptocurrency network alive. Cryptocurrency networks can be forked, copied, improved on, or better marketed. This is why they are all very risky investments. There is no real moat around them.”
No doubt they also need a centralised government authority to change them around so that they fit in with the existing debt-based monetary system. The banking sector obviously has an axe to grind here, and some elements in this sector will be the last to be dragged screaming into the new evolution of money.
We are at the crossroads of the biggest shift in the monetary system in the last 2 thousand years. With such entrenched views on both sides, there is bound to be much upheaval. However, we will hope that the freedom to hold your own wealth and to transact it how you wish will win out in the end.
