American economist Brian Wesbury shared his thoughts on what would happen if the masses abandon fiat currency and replace it with Bitcoin. He discussed whether the government will allow it to happen and how Bitcoin can become a real currency.
Economist Brian Wesbury answers questions about the public giving up bitcoin as legal tender
Brian Wesbury is an economist who focuses on macroeconomics and economic forecasting. He is currently the chief economist of First Trust Advisors, a financial services company based in Wheaton, Illinois.
Last week, he was asked on “Fox Business News” what would happen if “if the masses abandon fiat currency”, “will it trigger a financial collapse” and “can bitcoin replace the dollar?” Wesbury first admitted:
Many people who buy Bitcoin and other cryptocurrencies think they will replace the U.S. dollar.
He explained: “If you want to use U.S. dollars instead of U.S. dollars, if all M1 (including all checking accounts and cash) in the system is taken away, divide it by all possible bitcoins (including 21 million)-if Substituting U.S. dollars for U.S. dollars will eventually be worth more than 300,000 U.S. dollars.”
However, he asked many questions: “Will the government allow this to happen? Can you pay taxes with Bitcoin? Can you buy anything you want with Bitcoin?” Economists believe:
To have real money, this is what must happen… Therefore, there is still a long way to go to achieve this goal.
The chief economist did not mention that more and more jurisdictions have begun to accept Bitcoin for taxation. For example, the Swiss canton of Zug announced that it will start accepting Bitcoin taxes this year. Several other local governments in Switzerland have also made similar announcements, such as Zermatt.
Recently, the Mayor of Miami said that he is working to allow Bitcoin to be used to pay for city services. In addition, more and more stores accept Bitcoin payments. For example, payment giant Paypal plans to allow people to use cryptocurrency to pay for goods and services for the 2.8 million merchants in its network this year.
Wesbury also claimed that Bitcoin’s volatility is one of the problems. He gave an example, he jumped into the car with two bitcoins in his pocket. “When I arrived at the car dealership, I didn’t know whether I could buy two cars or half a car. This is one of the problems with Bitcoin.” He concluded:
It is so changeable that we really don’t know its value.
However, many experts believe that Bitcoin’s volatility decreases as the adoption rate increases. Alliance Bernstein’s Inigo Fraser-Jenkins stated in December last year that Bitcoin’s volatility has dropped significantly in the past three years, making it a more attractive store of value, and its relative volatility with gold and stocks has both fallen Historical low. In July, BTC’s volatility reached a three-year low. In addition, billionaire investor Bill Miller (Bill Miller) said on Friday that the higher the price of Bitcoin, the lower the risk.
Do you agree with Wesbury? Let us know in the comments section below.
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