May The Best Money Win? Anti Bitcoin Countries React

An opposite reaction to the “Bitcoin Law” passed by El Salvador and to its growing adoption was to be expected. Mainstream media has been replicating news on BTC alleged negative environmental impact, its use for illicit activities, and others.

However, the Director of the Dutch Bureau for Economic Analysis, Pieter Hasekamp, might be the runner-up for the prize to the most anti-Bitcoin article of the week. His publication titled “The Netherlands Must Ban Bitcoin” it’s a critic of BTC and a defense of fiat currencies.

Thus, he calls the cryptocurrency a bad form of money due to its “unclear origin, uncertain valuation, shady trading practices”. He even goes on to say that cryptocurrencies are not used in regular payment transactions.

His argument is based on Gresham’s Law, elucidated in the XVI century, and used to measure the properties of good and bad money. This economic law has a fundamental principle: bad money drives out good.

Hasekamp believes that the argument in defense of Bitcoin is wrong. He claims the cryptocurrency has none of the three functions of money: unit of account, means of payment, and store of value. At the same time, he argued that fiat currencies “score well” in these properties and are a good store of value. He said:

In recent decades, there has been hardly any currency devaluation. Although inflation is now cautiously rising, there are few people who believe that we are returning to the figures from the 60s and 70s.

The government official argues that new form of electronic payments based on fiat currencies have improved their ease of use. His conclusion is that the current financial system works “quite well in practice”. In the future, he predicts central bank digital currencies (CBDCs) will improve it further. He adds:

Cryptocurrencies are therefore unsuitable as a unit of account and means of payment outside the criminal circuit (…). Gresham’s law is replaced by Newton’s law: what goes up, must come…

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