- The Dutch government must ban Bitcoin as it’s bad money that could drive the euro – or good money – out of circulation, an official has stated.
- Bitcoin also doesn’t fulfill any of the three functions of money, the official, who’s in charge of a national economic bureau, further stated.
There are countries like El Salvador that have embraced Bitcoin and want to make it part of their economic agenda and there are others like China and India that have continued to fight it. One official believes that the Netherlands should join the latter and ban Bitcoin. The official, who’s in charge of a national economic bureau, believes that Bitcoin threatens the circulation of the local currency.
Pieter Hasekamp published an essay attacking Bitcoin recently, claiming it has failed to fulfill any of the three functions of money. Hasekamp is the director of the Dutch Bureau of Economic Policy Analysis, which falls under the country’s Ministry of Economic Affairs. Its goal is to deliver economic analysis and forecasts, both to the Dutch government and the European Union.
In his essay titled “The Netherlands must ban bitcoin,” Hasekamp outlined various reasons for which he believes the Dutch government should ban Bitcoin. The first, he says, is based on Gresham’s Law. This popular law states that ‘bad money drives out good money.’ He believes that Bitcoin, or the bad money, could pose a threat to the circulation of the euro which is the national currency in the Netherlands.
One of his arguments against Bitcoin is that it has failed in the three roles of money – unit of account, store of value and means of payment. Volatility, theft and fraud and its lack of ease of use are some of the issues barring Bitcoin from these three roles.
“The ultimate collapse of the Bitcoin bubble is inevitable”
Hasekamp believes that Bitcoin, and other cryptos, perform “far worse than public money on all counts.” He added:
There is no value retention, ease of use suffers from a lack of acceptance and security is undermined by outright scams. Cyber transactions only score well on the privacy aspect – and that anonymity is exactly what makes them attractive to criminals.
He went on to sing the same old song – that Bitcoin is only good for criminals. This myth continues to be busted, with criminals who use Bitcoin being unearthed one after the other. In one of the best illustrations, the U.S government was able to recover a majority of the BTC that major oil firm Colonial Pipeline paid in ransom to a group of hackers.
However, for the economist, cryptos are nothing but a bubble. He captured this, stating:
Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a contagious narrative: a contagious story in which people believe because other people believe in it. Gresham’s law is replaced by Newton’s law: what goes up, must come down. The ultimate collapse of the crypto bubble is inevitable.