A recent study suggests that the existence of private decentralized cryptocurrencies such as Bitcoin can have a health impact on government fiscal and regulatory policies.
This view is made by three researchers in their paper "How does a private digital currency affect government policy? Said in the book. They believe that in the case of the global financial system, the impact of cryptocurrency is not limited to whether it is used by the majority of the population.
- Deputy Governor of the Bank of France: Encrypted assets have the potential to replace the traditional banking system, stabilizing the currency or will have a systemic impact
- Say good and dollar 1:1 anchor? This stable currency is priced at $34 in a short period of time.
- Known as Bitcoin 2.0, it almost died? A quick glance at the past and present of ETC
- His company plunged Bitcoin several times in a year, and the list of Forbes donated $1 billion in cross-border legends.
- The first emergency rate cut since the financial crisis to rescue the market, or push the crypto market back to a bull market
- Analysis | Entities need to obtain BaFin license. Does the new law pave the way for Germany to become a "cryptocurrency paradise"?
The author of the article believes that cryptocurrencies can be used to test fiscal and regulatory policies. Although the current cryptocurrency may not be able to replace the US dollar, its positive impact on the existing monetary system can be reflected in three aspects.
First, citizens can benefit from the existence of cryptocurrencies because they offer a variety of options. In addition, private digital currencies can curb monetary policy, resulting in lower inflation.
Second, cryptocurrencies can encourage local investment and complement and not replace it. In the process, it will constrain monetary policy, such as reducing inflation, resulting in a higher return on investment.
Third, the government also benefits from using cryptocurrencies in the local economy because it can earn income through taxation and benefit from local investments.
The author of the paper also believes that “private digital currencies are important in emerging markets facing crisis. In those economies with high instability, the government will only formulate policies based on its own interests without considering the interests of citizens.”
Image source: pixabay
By Liang CHE
This article comes from the push bitpush.news, reproduced need to indicate the source.