This weekend, Ecuador joined at least 5 other countries in walking toward a future that replaces paper and coins with cryptocurrency. But, are these national experiments likely to lead to the future that comes to mind when we think of Bitcoin?
AWildDuck offers this 2-sentence analysis:
- Most governments and national banks that experiment with cryptocurrency have no intention of empowering citizens nor decoupling their monetary supply from political control
- But in the end, that’s exactly where they are headed
These national experiments are fascinating. Including Ecuador, there are at least 6 national efforts to embrace cryptocurrency around the world, including two in Africa, two in Latin America, Iceland and Israel.
It’s unfortunate that each potentate has created a disparate, internal and proprietary currency. Most of these territorial adopters have adopted neither a mathematical supply cap nor a permissionless blockchain. They buy into the legacy ‘wisdom’ that controlled inflation is necessary to stimulate spending and grow an economy.
Perhaps they see cryptocurrency as a an evolutionary mechanism to lower the production and distribution cost of coins and bills and thwart counterfeiting—just as many countries have switched from paper bills to plastic. That’s a limited view of a very positive revolution in the making. The leaders and central banks of many countries seem to miss the point. It’s not just about new technology. It’s about free markets, limited supply, public trust and citizen empowerment. In fact, it’s all about growth, free markets and the expansion of wealth.
Hopefully, these experiments are just a step toward combining monetary policy with an open digital currency while fostering a grass roots revival of public trust… Eventually, governments will recognize that properly implemented cryptocurrency—one that is free to usurp the national mint—leads to increased faith in government. At least, if one’s government demonstrates a willingness to decouple politics from monetary policy.