Guillaume Vuillemey: “Cryptocurrencies can have a future, but not as money”

If cryptocurrencies (Bitcoin, Libra, etc.) can become speculative assets and used as payment systems, then their existence would be subject to political sovereignty issues, believe economists in a forum “in the world”.

stands. The cryptocurrency revolution has been announced for several years, but it has been slow to change our lives. The initially very strong interest in Bitcoin has faded. More recently, the cryptocurrency craze resumed after Facebook announced its imminent launch of Libra. The project is ambitious because, according to the information provided, “Libya’s mission is to facilitate the development of a simple global monetary and financial infrastructure that serves billions of people”.

The response of many was to predict the end of national currencies and the emergence of a monetary order completely devoid of public authorities such as the state and the European Central Bank. Realistic? Let’s be clear: to us, this vision of the future seems to stem from a near-impossible liberal utopia. To support our critical point, there are some basic arguments.

To be worthy of the “currency” name, an asset must be used for transactional purposes in a common way, which has not been the case with any cryptocurrency to date. Also, in order for many people to agree to use an asset as a currency, its value must be stable and its users need not be constantly suspicious.

​Great power of the country
So instead of asking ourselves every morning how much a euro is worth, we use the euro every day. Any cryptocurrency that claims to “hyper-generate” public money will have to address this fundamental problem before it can become mainstream on exchanges.

In this regard, the state has the advantage that no private cryptocurrency, even one backed by a powerful entity like Facebook, can surpass. Because these advantages are due to the nature of political sovereignty: a country can pay us in its own currency.

First, states can require corporations and individuals to pay their taxes in their own currency. Second, they can require that all accounting documents be produced in their own currency. Third, all public benefits, including unemployment benefits, pensions, civil servant salaries, etc., are paid in public currency.

As long as these three conditions are met (it’s hard to see how they do that, unless a country completely abandons any notion of sovereignty), companies will continue to pay their employees in their own currency

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