Jeffrey Tucker, a well known economist and the editorial director of the American Institute for Economic Research (AEIR), urges governments and central banks to let go of trying to control the crypto world or trying to create their own state-backed cryptocurrencies. He suggests they focus on what they've been doing: fiat, gold and the banking system.
In his recent editorial, Tucker points out how the state has monopolized currencies which directs all commercial traffic and controls economic life. Speaking in disfavor of the state meddling to try to compete in the free marketplace of cryptocurrency, he says:
I’m not a believer. They won’t compete in the marketplace. They might achieve the opposite of the stated goal. Truly rivalrous competition is just now starting to exist in a sector long monopolized by governments. More than a century ago, most government in developed economies created central banks to manage an official currency, directing all commercial traffic through its portals as a way of controlling economic life. It was the end of currency competition and independence in the banking industry.
Government control of currencies led to "world wars, depression and inflation, enormous government indebtedness, and the rise of leviathan states" that printed their way to domination and wealth. Tucker recognizes the potential of decentralized-ledger technology to show a free market competition in the marketplace to see what a real currency can look like.
Cryptocurrencies and blockchain technology can bring about an end to the currency monopolies exerted by centralized governments. Tucker laments about how the government complains about anti-competitive behavior int he crypto sector, while it has long held an authoritarian control and prevented competition. He notes that with all the choice out there, even though some don't like it, it's typical of a real free market entrepreneurial endeavor that has a "true trial-and-error culture ".
Tucker praises crypto as the "most exciting thing in money and finance on the planet". Governments have no business putting their restricting controlling hands on something that can change the world and stifle it's potential. Intervention would ruin the progress and potential:
Intervening will only result in more costly regulation and probably end up setting back the cause of genuine competition.
The best option for governments is not to create crypto liek the European Union is trying to do with the ECB Coin. They should try to "reinvent the wheel", instead should be "enabling light-touch regulatory environment to allow such innovations flourish on their own."
He's very much in favor of the free market approach to crypto, suggesting the EU "reform the European financial system and increase competition through deregulation and reduced regulatory barriers to entry". He events wants a stop to the fiat system and a return to the gold standard. This is how governments should use their power, by not interfering with the crypto market.
In closing he says:
When the private sector is innovating, government and central banks should leave them alone. And an even better rule: if you didn’t invent it, and you made no contribution to making it more valuable, you can’t regulate it either.
I think he's one of the most reasonable mainstream economist to speak on crypto. Usually you hear the old school financial "experts" bashing bitcoin or the cryptocurrency and blockchain technological and economic breakthrough and potential, but not him. That's a welcome change in my book, and hopefully more mainstream people listen to what he has to say.
Thank you for your time and attention. Peace.
References:
- Keep Your Hands Off Cryptocurrency, Economist Tells World Governments
- Governments and Central Banks Should Look to Gold Not Crypto
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