thecoinrepublic.com
- Dutch advisor strong advocates against Bitcoin adoption for the country’s economy
- Essay indicates that Bitcoin fulfills none of the three basic functions of money
- Ban is inevitable according to the author because of scams, instability and no intrinsic value
As El Salvador rises to become the first country to legalize Bitcoin as a legal tender, European countries still remain susceptible to the digital currency. Official Economic Analysts of the Dutch Government write and advocate against any kind of Bitcoin adoption in the country, raising concerns about fraud, scams, energy consumptions and devaluation of fiat money affiliated with the digital coin.
Dutch Advisor writes firmly against Bitcoin
Pieter Hasekamp, who is the director of the Dutch Bureau for Economic Analysis, Ministry of Economic Affairs and Climate Policy, recently wrote an essay -“The Netherlands must ban bitcoin” that strongly voices his opinions against any type of cryptocurrency, let alone Bitcoin, should be banned to enter the State’s financial framework. Hasekamp believes that the rate of scams and fraudulent activities that come along with Bitcoin is a major concern for any Government and that it cannot be bypassed as it is a part of Bitcoin.
The essay focuses on all the reasons why Bitcoin should be banned in its entirety in the country. Apart from energy consumption also being one of the major concerns, the analyst argues that Bitcoin fails to meet any of the three requirements of money. The essay also calls out Gresham’s law. It terms Bitcoin to be ‘bad money’ and the national currency as ‘good money’. The law states that when bad money comes into power or circulation, it decreases the flow of good money. On the contrary, Hasekamp considers the law to work opposite in this case. He believes that Bitcoin will run out of circulation in the near future and nobody will want it.
Ban should be imposed to save the Dutch economy from a crash
The fear of a financial crisis that leads to a crash of the economy is brought up in the essay. According to the economist, the longer the country waits for the demolition of Bitcoin, the larger negative impact it might cause to the economy. Hasekamp judges Bitcoin to be of no intrinsic value and it is only being traded right now because the people think that it is of value. Once the volatile nature of Bitcoin and other coins truly start to instill financial instability amongst the unprotected investors, the damage will already have been too big to recover from.
Nevertheless, the ban seems to be a fiction dream because of the power Bitcoin holds internationally. It is not something that can be regulated by Governments because of the decentralized system and hence, any sort of ban will only be useless. This was majorly the reason a ban on Bitcoin was withdrawn by the Dutch Finance Minister, Wopke Hoekstra in the year 2018.