The States have cryptomonetary desires… but they forget one important point: it is precisely to escape their unbridled monetary creation that cryptos are in such high demand.
A crypto currency managed by a central bank is an oxymoron, » says economist Daniel Lacalle.
The reason why citizens demand cryptos is to escape the unbridled monetary creation of central banks.
Cryptos push to the extreme the status of fiat money – which is now disconnected from any anchoring, any fundamental value and any restraint.
Central bank currencies have become pure tokens. As such, they are unsuitable for use as reserve assets in a long-term perspective.
This is why people are asking for cryptos: to escape the monopoly of central bank tokens issued without limit.
A bullish momentum
The demand for cryptos is of course boosted by the prospect of unlimited monetary issuance by central banks; it is this dynamic that is driving the rise – a rise that then lends credibility to the holding of cryptos.
The upward movement of cryptomoney is validated by walking.
If central banks want to avoid competition from cryptos, it’s very simple: all they have to do is to revise their policy of issuing fiduciary money in a big way, to return to orthodoxy, and to defend the purchasing power of the currencies they issue.
A crypto is the logical extension of the token currencies that fiduciary coins have become – with one advantage, limited issuance, and one disadvantage, limited use.
[Editor’s note: Find all of Bruno Bertez’s analyses on his blog by clicking here.]
Bruno Bertez was head of a press group specialising in economics and finance, and founded the daily newspaper La Tribune in 1985. He writes regularly in the Swiss business daily L’Agefi, as well as on his personal blog, which can be found here: https://brunobertez.com.