During a discussion on digital currencies entitled “Old Money, New Cash,” Andy Haldane, Chief Financial expert and the Executive Director of Monetary Analysis and Stats of the Bank of England and his group stated that “Digital currencies are ‘more difficult cash’ than a gold standard” because “sustained adoption [of bitcoin] would see continuous deflation.”
Haldane began by explaining the essentials of bitcoin and its “benefits and downsides” as a peer to peer payment system. Haldane and his group described bitcoin in 4 major aspects:
- Distributed: higher resilience, no central control, a coordination problem
- Pseudonymous (and possibly anonymous)
- Push-only (no ‘direct debits’): payments are final and can not be imposed
- Individually inexpensive, but socially costly (but this could be repaired)
Haldane continued to expound that bitcoin might interrupt the traditional financial industry, due to the world’s significantly underbanked areas and the surge of boost in wise phone uses.
2 million UK adults do not have checking account and 2.5 billion people in the world have no access to monetary services, stated Haldane. However, offered the estimate that 80 % of the world’s population will certainly own a smartphone within 5 years, Haldane believes that lots of might turn toward digital currency to store their cost savings.
Regardless of his positive remarks and discussion on bitcoin, Haldane brought a closure to his talk by saying, “The least interesting feature of Bitcoin, and other distributed ledger systems, is that they are digital. Digital currencies are crucial for how they deploy the readily available technology in a new method.”
Photo Katie Chan / Wikimedia (CC)
The post Bank of England: Bitcoin is “Harder Money” than Gold Due to Deflation appeared initially on Bitcoin Magazine.