usBiden Should Integrate Bitcoin into the US Financial System

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Kataryna Habeliia November 30, 2020

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Opinion: Biden should integrate bitcoin into the US financial system

Joe Biden’s administration should focus on integrating bitcoin into the US financial system instead of creating a digital dollar like China. This is the opinion of Niall Ferguson, a former professor of history at Harvard and Oxford and now a senior fellow at Stanford.

In a new article, the world-renowned economic historian looked at the U.S. dollar, gold, and bitcoin as the monetary revolution continued, accelerated by the COVID-19 pandemic.

Its consequence was the further adoption of the first cryptocurrency by such investors as Paul Tudor Jones, Stanley Druckenmiller, Bill Miller, and even Ray Dalio. Ferguson also pointed to a softening of the position on bitcoin by such opponents as Nouriel Rubini and Peter Schiff.

Drawing parallels with the plague of the 14th century, the historian noted that the COVID-19 pandemic allowed digital gold to travel a decade long in only ten months. And this happened not only due to closed banks but also due to the tightening of financial supervision.

Bitcoin as a measure of Capital Preservation

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In addition to the means of payment, bitcoin is increasingly perceived as a measure of capital preservation. For Ferguson, this was confirmed by the purchase of bitcoin by MicroStrategy and the decision of PayPal to enable its customers to operate with cryptocurrency.

The disadvantages of bitcoin in the form of slow transactions, a high concentration of hash rates in China, and significant energy costs for mining, according to Ferguson, are outweighed by the sovereign nature and the established emission of the first cryptocurrency.

The historian noted that 2020 created the preconditions for the success of the digital yuan. China’s CBDC has a “huge” potential for application, including in cross-border trade settlements between the countries participating in the Belt and Road Initiative.

According to Ferguson, in the new world with the disappearance of cash, the demand for privacy will increase.

“All our payments will be recorded, centrally stored, and scrutinized by artificial intelligence — regardless of who can access our data — Jeff Bezos from Amazon or Xi Jinping from China,” he said.

The historian believes that the United States should not follow China’s example — the Joe Biden administration should recognize the benefits of bitcoin.

“The US financial system was originally designed to be less centralized and more respectful of privacy than the systems of less free societies,” he explained.

Recall that in March 2019, Niall Ferguson admitted that he was wrong about Bitcoin, once calling it an “illusion.”

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