Could a non-state cryptocurrency like bitcoin become a global reserve currency? I first proposed the idea back in November 2013, long before bitcoin’s rise to $19,000, decline to $3,200, recent ascent to $13,000 and current retrace.
The idea is intriguing on a number of levels. In terms of retaining value though thick and thin, the ultimate reserve currency cannot be printed (and thus devalued) with abandon by a government. Gold and silver have served as the ultimate reserve currency, as precious metals can be traded for commodities and services, provide collateral for debt and serve as reliable stores of value.
While many observers believe gold is still the only reliable reserve currency (or if you prefer, the only reliable backing for government-issued paper money), it’s a worthy thought experiment to ask if a digital currency could also act as a reserve currency.
Even as a niche currency, non-state issued digital currencies could play a role in the global economy, especially if government-issued fiat currencies destabilize/ devalue due to massive money creation by desperate central banks and state treasuries.
Is scarcity enough to back a non-state issued currency? Bitcoin offers a real-world experiment.
As for Facebook’s proposed Libra digital currency–it’s simply state-issued fiat currency in a corporate package. Libra will be backed by state-issued fiat currency, so it’s nothing but a corporate-controlled proxy for all the unbacked, prone-to-hyperinflation state currencies.
2 comments:
In revelation 6 the rider on the black horse has a pair of balances as the world goes into economic collapse. Revelation 13 we see the mark of the beast system. Interesting F.B. chose Libra scales (balances) as a symbol.
That is interesting - I didn't make that link - thanks
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