American economist Brian Wesbury shared his ideas on what would happen if the masses abandoned fiat currencies and adopted bitcoin. He discussed whether the government would allow this to happen and how bitcoin can become a real currency.
Economist Brian Wesbury answers the question about the masses getting rid of Fiat coins by bitcoin
Brian Wesbury is an economist with a focus on macroeconomics and economic forecasting. He is currently the chief economist at First Trust Advisors, a financial services company based in Wheaton, Illinois.
He was asked in Fox Business News last week about what would happen “if the masses abandoned fiat money”, “would trigger a financial collapse” and “could bitcoin replace the dollar?” Wesbury began by acknowledging:
Many people who are buying bitcoins and other cryptocurrencies believe that they will replace the dollar.
He explained: “if they replaced the dollar, if you take all the M1 – it’s all current accounts and money – in the system, you divide it by all the bitcoins that may exist – 21 million of them – you end up with more than $ 300,000 of value if it replaced the dollar. “
However, he raised a number of questions: “Will the government allow this to happen? Can you pay your taxes in bitcoin? Can you buy anything you want with bitcoin? ”The economist said:
This is what needs to happen for you to have a real currency … so it is a long way from that.
The chief economist did not mention that an increasing number of jurisdictions are already adopting bitcoin for tax payments. For example, the canton of Zug, Switzerland, has announced that it will start accepting bitcoin for tax payments this year. Several other local governments in Switzerland made a similar announcement, such as Zermatt.
The mayor of Miami recently said he is working to allow payment of municipal services in bitcoin. In addition, an increasing number of stores are accepting bitcoin payments. Paying giant Paypal, for example, is planning to allow people to use cryptocurrencies to pay for goods and services at 2.8 million merchants on its network this year.
Wesbury also stated that bitcoin volatility is one of the problems. As an example, he said he got into the car with two bitcoins in his pocket. “When I got to the car dealer, I didn’t know if I could buy two cars or half a car and that’s one of the problems with bitcoin.” He concluded:
It is so volatile that we don’t really know what it is worth.
However, many experts have argued that bitcoin’s volatility decreases with increasing adoption. Alliance Bernstein’s Inigo Fraser-Jenkins said in December that bitcoin’s volatility has significantly decreased over the past three years, making it a more attractive value reserve, and its relative volatility for both gold and equities has dropped to historically low levels. low. In July, BTC volatility hit a three-year low. In addition, billionaire investor Bill Miller said on Friday that bitcoin becomes less risky the higher the price.
Do you agree with Wesbury? Let us know in the comments section below.
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