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Former Greek finance minister: Bitcoin adoption would aggravate crisis

  • Former Greek Finance Minister Yanis Varoufakis criticized the possible adoption of Bitcoin (BTC) as a means of payment to replace fiat currencies.
  • Varoufakis stressed that Bitcoin has a limited supply and is controlled by whales, which could lead to a worsening of crises.

Former Greek Finance Minister Yanis Varoufakis has published his views on Bitcoin, cryptocurrencies and the blockchain technology in general. In the article entitled “Why Bitcoin is not a socialist’s ally,” the former minister shows a critical stance toward the adoption of Bitcoin as a means of payment.

Bitcoin (BTC) is the democratization of money

Varoufakis said that it would be a mistake to replace the Fiat currency with Bitcoin. The former Greek minister argued that in a crisis situation, adoption would worsen circumstances and have negative effects on humanity. In support of his political position, the former Greek minister made the following statement:

(…) replacing fiat money with Bitcoin would take us back to a postmodern version of 19th Century America – not exactly a prospect socialists should go to the barricades for. (On Bitcoin) that democratising money by means of a monetary commons will not democratise economic life but, rather, make capitalism uglier, nastier and more dangerous for humanity.

The former Greek minister added that Bitcoin does not have the characteristics to “protect the working class” in the event of a crisis. In that sense, Varoufakis said Bitcoin could not change its monetary policy in the event of a crisis to benefit the less wealthy.

Instead, Varoufakis said that BTC’s supply is limited and Bitcoin whales will always have more incentive to restrict it and to act “at the expense of the public interest”. The former Greek continued to say:

The free-rider problem that guarantees the maximal reinforcement of any capitalist crisis (in any economy relying on Bitcoin as its main currency) will be turbocharged by the unequal ownership of Bitcoin – which is unavoidable in any monetary system overlaid upon contemporary capitalism.

In contrast, the former Greek minister seems to be guided by a “blockchain, not Bitcoin” approach. A similar position is currently being voiced by the Chinese government and, according to Varoufakis, is based on the capabilities and potential of blockchain technology to create a “common currency heritage”.

Varoufakis claims to be an enthusiast of blockchain technology since 2011. The former Greek minister believes that unlike Bitcoin (BTC), this technology can be used to help people and “overcome capitalism”. The former Greek minister stated

Bitcoin’s great appeal is that it breaks the cronyist chain linking central banks and private bankers. However, it does not undermine the cronyism of the network of bosses, politicians and private bankers. […]

In other words, I shall argue that Bitcoin is not fit for purpose under capitalism, or as a vehicle toward transcending capitalism, but something like Bitcoin will characterise monetary systems in a future world free of private banks and share markets.

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Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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