The European Union is a hotbed of activity, and most of it has been pretty disturbing. The E.U.’s dam of regulation is literally breaking apart, with refugees pouring out everywhere. Unemployment is at an all-time high in many European countries. Greece and Cyprus have already seen economic collapse, and Italy, Portugal, and Ireland are next in line for austerity. Now, a new set of regulations against cash is ready to funnel more freedom away from citizens towards The State. Where does Bitcoin fit into this political quagmire?
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Andreas Antonopoulos once said, at a Bitcoin conference in Washington D.C. in 2014, “I’m against Bitcoin regulation because regulation doesn’t ——ing work!” Speaking of regulations that haven’t worked, massive, multi-national regulations throughout Europe has been the Soup of the Day ever since 1993, with the Euro introduced in 2002, and success has been very hard to find. Recent years have brought even more regulation, followed by more problems, poverty, and violence. The next stage of this tyrannical rule of law will banish the 500-euro note, which is being blamed for the funding of terrorism. Once this scapegoat moves through the regulatory passage, the 100-euro note can’t be far behind. Between the two notes, that is almost 50% of the value of the Euro, overall.
The entire world is in discussions to do something with digital currency, from China to Australia, to the United States, so why should the entire E.U. be any different? Cash is the last bastion of private economic transfer left, and the banks and regulators colluding against cash may have unforeseen ramifications, like a movement towards digital currencies like Bitcoin, or the more privacy-minded Dash. With negative interest rates also becoming commonplace, these actions may force people to find value elsewhere.
“We sure need a medium of exchange and we sure need a store of value,” said William White, an adviser to the Organization for Economic Cooperation and Development, said to Bloomberg Business, noting that it’s “not impossible” decentralized currencies will eclipse official money. “If it turns out that the system we’ve got doesn’t provide that, then something else will.”
Issues with the looming banishment of cash will have severe consequences for some members of the populace. For example, how will the elderly, who are not internet or tech-savvy, get along without cash? Suspicions about government surveillance and abuse are not just an American phenomenon. Many in Germany see how this can give way too much power and control over money to The State.
Some economists, like Thomas Mayer, a former chief economist at Deutsche Bank AG are calling out the failures of Keynesian economic policies that will use this as a back-door out of economic jail. He says many ruling economists “see the abolition of cash as an exit out of their textbook problems,” he said. “It’s my suspicion that they haven’t thought through the institutional implications of that. It opens the door to private-sector money (Bitcoin), and that’s a completely new world.”
Removal of cash as an option is definitely in the regulatory pipeline of most Western cultures. It makes a consumer “run on the bank” impossible, it can force people to pay the bank to hold funds through negative interest rates, and opens the door to government monitoring every transaction, and debiting accounts automatically. Regardless of you locale, banning cash will have serious consequences to anyone who wants economic freedom in the future.
This may increase the long-term value of Bitcoin and certain altcoins, but will it be for the wrong reasons? Many unfortunate people may move to the world of decentralized digital currency because they have to, not because they want to.