U.S. economist Brian Wesbury shared his thoughts on what would happen if the masses dropped fiat currencies and instead adopted bitcoin. He discussed whether the government would allow it and how bitcoin could become a real currency.
Economist Brian Wesbury answers question about masses weakening Fiat currencies for Bitcoin
Brian Wesbury is an economist focusing on macroeconomics and economic forecasting. He is currently chief economist at First Trust Advisors, a financial services firm headquartered in Wheaton, Illinois.
He was asked on Fox Business News last week what would happen if the masses dropped a currency, or caused a financial collapse, and “can bitcoin ever replace the dollar?” Wesbury began by acknowledging:
Many people who buy bitcoin and other cryptocurrencies believe that they are going to replace the dollar.
He explained: ‘If you were to replace the dollar, if you took all the M1 – that’s all the checking accounts and cash – into the system, you would divide it by all the bitcoin that could exist – 21 million of it – you would have more than $ 300,000 worth if it were to replace the dollar. ”
However, he raised a number of questions: ‘Will the government allow it? Can you pay taxes in bitcoin? Can you buy anything with bitcoin? ‘The economist thinks:
This is what needs to happen to have a real currency … so it’s a long way from there.
The chief economist did not mention that a growing number of jurisdictions already include bitcoin for tax payments. The canton of Zug in Switzerland, for example, has announced that it will start accepting bitcoin for tax payments this year. Several other local governments in Switzerland have made a similar announcement, such as Zermatt.
Recently, the mayor of Miami said he was allowing payments for city services in bitcoin. Furthermore, a growing number of stores accept bitcoin payments. The payment giant Paypal, for example, plans to enable people to use cryptocurrency to pay for goods and services at 2.8 million merchants in its network this year.
Wesbury also claimed that the volatility of bitcoin is one of the problems. As an example, he said he jumped into his car with two bitcoins in his pocket. “When I arrived at the car dealership, I did not know if I could buy two cars or half a car, and that’s one of the problems with bitcoin.” He concluded:
It’s so volatile that we do not really know what it’s worth.
However, many experts have argued that the volatility of bitcoin decreases with increasing adoption. Inigo Fraser-Jenkins, Alliance Bernstein, said in December that bitcoin volatility had declined significantly over the past three years, making it a more attractive store of value, and that relative volatility against gold and equities had fallen to historically low levels. . In July, BTC volatility hit a three-year low. In addition, billionaire investor Bill Miller said Friday that bitcoin becomes less risky the higher the price goes.
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