IMF Unintentionally Makes A Strong Case For Bitcoin
Today International Monetary Fund published a blog post titled Emerging Economies Must Prepare for Fed Policy Tightening, warning countries to be ready to take measures when Fed takes policy actions. Interesting to see IMF demonstrating how powerful Fed is, how Fed's policies have global implications. I know we live in a world where global economies are interconnected and that US dollar is a global reserve currencies. Actions of Federal Reserve, the central bank of the United States not only has influence in the US but also globally.
Isn't this what bitcoin has been trying to solve all along? How is it ok for one entity, a small group of people sitting in a conference room making decisions that will financially affect countries, businesses and people around the world? Bitcoin's clear mission was to provide alternative to the current global financial system, after we saw what happened with the 2008 financial crisis that started in the US, but had long lasting negative impact to the economies around the world, businesses and people's finances.
Bitcoin's genesis block from thirteen years ago had a message in it, that ready - "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks." While this message was referring to an article, it also serves as something for us to remember why the bitcoin was created in the first place. I can understand that bitcoin can be many things for many people, and used for various purposes. But I also believe its core mission was to offer people, businesses, and countries and alternative way, a better way to build the financial system. A system where we don't need to rely on one entity, or a group of entities to make decisions for the entire populations, entire worlds, especially when there is great deal of conflict of interests present.
It is as if global finances are for the bankers, of the bankers and by the bankers. What if these bankers turn out to be corrupt or incompetent to carry out tasks and decisions on behalf of larger populations? Removing bankers or any other entities from makes such important decisions in the form of central bank policies, and transferring that power to a selfless, transparent truth machine that is working like an atomic clock may just be the solution. Of course I am referring to Bitcoin blockchain network.
Ever since bitcoin became a legal tender in El Salvador, the same IMF along with World Bank and other has been criticizing this move and warning with bad economic consequences for the citizens of El Salvador. Perhaps, it's time for them to realize the real root cause of economic and financial instabilities, that is the centralized monetary policy making that serves the bankers first. If I were to build the hierarchy of benefits of Feds policies, I would list bankers at the top, then governments, then Wall Street, then perhaps US citizens and then the rest of the world.
Given this rigged system and failed policies, why should other countries continue embracing USD as a global reserve currency, and trust in central banks to protect their financial and economic interests. If in fact what this articles says is true, maybe it is time for sovereign countries to opt out of this system, at least partially and consider alternative solutions like bitcoin.
Adopting bitcoin as an additional legal tender or as a reserve currency/asset may at the very least serve as a hedge if things go wrong. Of course such decisions would also have political consequences and may even hurt trade agreements. Such decisions would never be easy one, but at the very least it is the responsibility of the people in these decision making positions to consider.
I am sure there are ways to take advantage of the benefits of Bitcoin network and also continue utilizing traditional system. Transitions do not have to be sudden and quick. Progress is made one step at a time. It wouldn't hurt to study, analyze, and evaluate various available options. When 2008 global financial crisis hit the world, there were no alternatives like bitcoin. Today we live in a different world, where not only there are alternative solutions but also bitcoin has proven to be solid monetary network and has been working perfectly and fulfilling its purpose.
When IMF says:
Policymakers may need to react by pulling multiple policy levers, depending on Fed actions and their own challenges at home.
I tend to agree. Policy makers may need to react. But this time they have more options. Don't have to continue with same old, same old.
Think Bitcoin!
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