Central Bankers Pulling Out the Stops to Kill Competition: Will Bitcoin Get the Axe?Adam Gardiner
It’s no secret that central bankers don’t like competition. Governments of any type don’t, that’s why their governments. They enjoy their monopoly and seek to squelch anything that might threaten it.
That’s why cryptocurrencies have come in for such strong opposition from central bankers, as they directly threaten the monopoly of monetary control that central bankers currently enjoy. While Facebook’s Libra cryptocurrency has been the primary focus of central bank attention in recent days, that doesn’t mean that Bitcoin has fully escaped the attention of central bankers. If anything, some central banks are now motivated than ever to shut down their competition.
Perhaps it’s not surprising that Germany has become the epicenter of the central bank anti-cryptocurrency movement. German Finance Minister Olaf Scholz has, on the one hand, stated that he wants Germany to become a leading actor in blockchain innovation and technological development, while on the other hand he wants the government to crack down on private currency issuance.
In his view, cryptocurrencies such as Libra and, presumably, Bitcoin should be banned. Per Scholz, “A core element of state sovereignty is the publication of a currency, we will not leave it to private companies.” Germany will work together with other European countries to ensure that private stablecoins such as Libra will not be able to exist as alternatives to the euro.
Since Bitcoin doesn’t have a central issuer, it would be interesting to see how Germany would try to crack down on Bitcoin. Whether used as a currency or as an investment product such as through a Bitcoin IRA, Bitcoin only continues to grow in popularity. And as events around the world have shown, Bitcoin remains resilient even in the face of opposition from repressive governments. So no matter what Germany and other governments end up doing to Libra, Bitcoin will remain just as popular as ever.