The Biden administration, instead of creating a digital dollar modelled on China, should focus on integrating Bitcoin into the U.S. financial system. This is the view of Niall Ferguson, the former Harvard and Oxford history professor and now a senior research fellow at Stanford.
Shocking and Incredible.
«Biden should integrate #Bitcoin into US financial system.»
Most respected financial historian alive @nfergus bitcoin comments to attract huge attention.
Favorite Establishment figure on monetary issues to galvanize action. Wow.https://t.co/xIgPIWgg88
— Dan Tapiero (@DTAPCAP) November 30, 2020
In a new article, a world-renowned scholar of economic history considered the U.S. dollar, gold and Bitcoin amid the ongoing monetary revolution accelerated by the COVID-19 pandemic.
Its consequences include further adoption of the first cryptocurrency, including by investors such as Paul Tudor Jones, Stanley Druckenmiller, Bill Miller and even Ray Dalio. Ferguson also noted a softening of his position on Bitcoin among its opponents, such as Nouriel Roubini and Peter Schiff.
Drawing parallels with the 14th-century plague, the historian noted that the COVID-19 pandemic has allowed digital gold to complete a decade’s worth of progress in ten months. And this occurred not only because banks were closed but also because financial oversight has tightened.
Apart from being a means of payment, Bitcoin is increasingly seen as a store of value. For Ferguson, evidence of this included MicroStrategy‘s Bitcoin purchase and PayPal‘s decision to allow its customers to transact in cryptocurrency.
The drawbacks of Bitcoin—namely slow transactions, a high concentration of hash rate in China, and substantial energy costs of mining—are, Ferguson argues, outweighed by its sovereign nature and the fixed supply of the first cryptocurrency.
The historian noted that 2020 also laid the groundwork for the success of the digital yuan. China’s CBDC has enormous potential for deployment, including in cross-border trade settlements among participants in the One Belt and One Road initiative.
In Ferguson’s view, in a world where cash disappears, demand for privacy will rise.
«All our payments will be recorded, centrally stored and thoroughly analysed by artificial intelligence — regardless of who might access our data — Jeff Bezos of Amazon or Xi Jinping of China», — stressed he.
The historian argues that the United States should not follow China’s example — the Biden administration should recognise the advantages of Bitcoin.
«The U.S. financial system was originally designed to be less centralized and more respectful of privacy than the systems of less free societies», — explained he.
Back in March 2019, Niall Ferguson admitted that he had been wrong about Bitcoin, which he had once called an “illusion.”
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