The Marshall islands has recently announced the creation of a national currency, fully digital. But does this mean it provided that all the crypto-currencies are currencies full ? In its report of march 5, 2018, which we have already spoken in other respects, the Bank of France replied in the negative. According to it, the Bitcoin – the first of all the crypto-currencies by the length as by the value – would not be a currency. A few explanations below.
What is a currency ?
Humanity has long passed for currency. Barter and the exchange seem to have marked the first millennia of human societies, and even Sparta in ancient Greece did not know the monetary system. One that also lends itself to the introduction of the gold persia the decline of this prestigious city… Since then, the currency is widely circulated, generally backed on gold or actual goods (rice, for example). Over the centuries, princes and States have imposed a monopoly on currency, which now enables them to produce foreign exchange at the marginal cost virtually nil : that paper ! All things that are remarkably well explained by the economist and philosopher Hans-Hermann Hoppe in his book, The Great Fiction.
A video may help to better understand the current definition of the currency itself :
Nowadays, central banks and public institutions consider that a currency must meet three criteria. These are simply the functions :
The opinion of the Bank of France on the Bitcoin
In his memorandum made public last Monday, that is to say the march 5, 2018, the Bank of France speaks specifically of the “bitcoin” by referring to its ” emergence “. But it is voluntarily that the rapporteurs have preferred to use the expression “crypto-asset” rather than the terms “crypto-currency” or ” crypto-currency “. This reminds us of the words of Jean-Claude Trichet, former president of the european central Bank :
The Bank of France estimated that the Bitcoin is not a unit of account, because rare are the prices expressed in Bitcoin. This argument seems doubtful, given that the development of this crypto-currency results in the expression of price in Bitcoin. In addition, on a global scale, you can find more of prices expressed in BTC than in kwanza of angola, or in lek Albanian… And it could be true, perhaps, until the swiss franc.
For what is the means of payment or means of exchange, the BDF believes that the “crypto-assets” are excessively volatile for that to be the case and that the transaction costs are too high. Yet, in spite of these limitations, more and more sectors open to payments in Bitcoin. We saw it with real estate sales in different countries, but also for a law firm irish or hot air balloon flights in Ille-et-Vilaine. And these are only examples among many others. The transaction costs vary in function of the crypto-currency in question, and the Ripple (XRP) must precisely its success to the low costs that it offers for international money transfers…
On the side of the reserve value, the note of march 5, says Bitcoin is not based on a power of “computing” without ” underlying reality “. And this is the case of most of the ” crypto-assets “, Ethereum seem to distinguish in financing real economic growth via the computer. But the argument would be admissible if the legal coins were also backed on a real value, which is less the case for a good century, little remains of this actual value being completely inaccessible to users of the euro or the dollar. Conversely, the Petro Nicolás Maduro is based on the actual, as well as other crypto-currencies, such as a backed on gold in Australia.
In fact, the real gripe comes more than that : it is the absence of a central institution regulatory. However, the latter is recent in history and will not happen with the States “forgers” ! Finally, the complaints of the Bank of France will also return against the monetary policy official. The question is whether there are simply still true currencies corresponding to something real. This may be the challenge of the times to come and, unfortunately, who knows, new crises…
Buy The Great Fiction of Hoppe on Amazon
Source : Capital