Opposite reaction of to The “Bitcoin Law” Passed By El Salvador And Its Growing Adoption Was To Be Expected. Mainstream media is copying the news on the alleged negative environmental impact of BTC, its use for illegal activities, and more.
However, Peter Hasekamp, the director of the Dutch Bureau for Economic Analysis, could be the runner-up for the award for most anti-Bitcoin article of the week. His publication, titled “The Netherlands Must Ban Bitcoin”, is critical of BTC and defends fiat currencies.
Thus, he calls cryptocurrency a bad form of money due to “ambiguous origins, uncertain valuations, shady business practices”. He also said that cryptocurrencies are not used in regular payment transactions.
His argument is based on Gresham’s law, which was clarified in the XVI century, and was used to measure the qualities of good and bad money. There is a basic tenet of this economic law: Bad money drives out the good.
Hasekamp believes that the logic in defense of bitcoin is wrong. They claim that money in cryptocurrency has none of the three functions: unit of account, means of payment, and store of value. At the same time, he argued that fiat currencies “score well” in these assets and are a good store of value. He said:
In recent decades, there has been hardly any currency devaluation. Although inflation is now rising cautiously, there are few people who believe that we are going back to the figures of the 60s and 70s.
The government official argues that the new form of electronic payment based on fiat currencies has improved their ease of use. Their conclusion is that the current financial system works “quite well in practice”. In the future, he predicted that the central bank’s digital currency[CBDC]Will improve it further. he adds:
Therefore cryptocurrencies are unsuitable as a unit of account and a means of payment outside the criminal circuit (…). Gresham’s law is replaced by Newton’s law: what goes up must come down. The eventual collapse of the crypto bubble is inevitable.
the other side of coinBitcoin is a tool for progress
A Dutch government official called on countries opposed to bitcoin to take action. They claim that waiting that long could make an “imminent” crypto crash at worst. Later, he compared cryptocurrencies to drug trafficking and pointed out that a complete crypto ban would be more effective.
David Rosa, a Ledger developer, published a rebuttal via his Twitter account. He claims that bitcoin must go through the properties of money in stages, first from a store of value to a unit of account. Furthermore, he emphasized that BTC is an emerging asset. Therefore, many people tried to use it to “get rich fast”.
After all, these investors have the opportunity to learn about the unique properties of bitcoin: immutability, censorship resistance, scarcity, permissionless. Many of these characteristics have made BTC an invaluable asset for people in developing countries, such as El Salvador, who have access to a global financial system and savings accounts that are out of reach of central banks. Rosa said:
It is intellectually dishonest to blame #Bitcoin and crypto assets for the financial instability caused by the crash. Fiat systems are flagged by central banks for keeping interest rates artificially low, leading to mis-allocation of capital resulting in drastic corrections.
Ultimately, people turn to BTC because they stop trusting their national governments. According to Rosa, this is the biggest crisis at the moment. In the world, it seems that central banks serve their own interests better than those they claim to protect.
BREAKING: Directors of the Dutch Bureau for Economic Analysis are calling for a complete ban on mining, holding and trading. #bitcoin and other crypto assets.
Article in Dutch behind the paywall:https://t.co/ECibJGBO4w
I have highlighted the main points in the formula
— David El Silvador Rosa (@dldasilvarosa) June 11, 2021
At the time of writing, BTC was trading at $37,041 with a sideways movement on the lower time frame. The first cryptocurrency by market cap needs a push from the bulls if it wants to break above the $38,000 and $40,000 resistance levels.