Global economist Jeffrey Tucker states in his latest report that Governments and Central banks should stay away from cryptocurrencies like Bitcoin and abandon the creation of national banking-based digital currencies.
Tucker wrote an editorial for the American Institute for Economic Research (AEIR) on handsome digital currencies, concluding that the very purpose of cryptocurrencies, decentralization, is at risk when a cryptocurrency is completely dominated and controlled by the state.
Turkey, Iran, and Switzerland have already announced to introduce their own cryptocurrency in a phased manner. Instead of stiffening into digital currencies, Tucker advises governments to focus on improving fiat currencies and the banking system.
The monopoly that governments have over the financial system leads to inflation, accumulation of sovereign debt, and economic warfare around the world. In his opinion, this is one of the main reasons for the prevailing poverty in the world.
“More than a century ago, most governments in the developed economies created central banks that manage an official currency and control all commercial traffic through their portals with a sole aim of controlling the economic life. It was the end of monetary competition and independence in the banking sector. “
Tucker is excited about cryptocurrencies(Bitcoin, Ethereum etc) and realizes that the population will have a real choice for the currency:
“I am not a believer. They will not compete in the market. They could achieve the opposite of the stated goal – the end of the monopoly. Really rival competition is just beginning in a sector that has long been monopolized by governments … Thanks to decentralized Ledger technology and some impressive innovations to create digital money and banking solutions. The technology works peer-to-peer and requires neither governments nor intermediaries to operate – we start to see what a real choice in the currency could look like. “
However, Tucker concludes that governments will not take a back seat but actively shape the market. With the crypto market still in its infancy since Bitcoin was founded in 2009, it remains to be seen how much the state will extend its control over digital currencies.