Digital Currency. Friend or Foe?
The Digital buck stops where?.
Digital currency is coming. Bitcoin, the darling of many investors, is a nuisance for many governments simply because it cannot be controlled by central banks or governments. Many governments are now planning to release a/their digital currency that can be traded and manipulated as physical currency is currently traded and manipulated. No central bank or government will want to issue a digital currency that cannot be manipulated by its policymakers, essentially creating a digital “Fiat” currency. In doing so, governments will simply be replacing physical with digital and not altering the mechanics of fiscal manipulation. A Global currency is another beast; such a currency will have to be backed by something of limited availability, possibly gold, or something that cannot be replicated, similar to Bitcoin. This may seem a contradiction but no coalition of governments would agree on using a digital currency that could curtail a member government’s ability to pin or float their currency against another unless currency borders are abolished.
The benefits of digital will be touted as being cleaner (no direct contact, and as we have seen over the last two years, many business and service providers worked with a “no cash” policy), less counterfeiting and reduced chances of outright theft.
The dark side? You will not be able to buy or sell anything without leaving a digital trace of your transaction. Governments may also grant authorities the ability to freeze assets, remove funds without your approval, and so on.
Do you believe the digital currency “revolution” will be a benefit, a mixed blessing, or an attack on freedom of movement and association?