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Corrupt Currency: Will Digital Currency Shake the World of Politics, Economics and Finance?

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New York University economist Norrell Rubini recently commented on the world's largest digital currency, the bitcoin, calling it "a very bad coin."

New York University economist Norrell Rubini recently commented on the world's largest digital currency, the bitcoin, calling it "a very bad coin."

"Corrupt currency is one of the worst temporary trends ever," said Warren Buffett, one of the world's richest men.

Bank of England Governor Andrew Bailey warned a few weeks ago, "If you are ready to lose all your money, buy it (cryptocurrency).

Nobel laureates in economics Joseph Stiglitz, Paul Krugman and Robert Schiller are also among the critics of cryptocurrencies, but they do not now predict that these currencies will suddenly disappear one day.

The cryptocurrency market has grown to nearly trillion in the past year, and the cryptocurrency market is expanding, despite all restrictions and surveillance.

Corrupt currency is not controlled by any country, company or central bank. Following the principle of decentralization, buying and selling in cryptocurrency does not require a broker and no institution certifies it.

The security of money transfer information is secretly monitored with the help of a large network of computers, whose nodes are spread all over the world.

Millions of dollars are circulating in this system and it is almost impossible for governments, central banks and regulators to monitor this process.

"We are at a crossroads."

Unlike critics, there are a large number of people who are trying to promote the corrupt currency and are convinced that their movement will not end.

They see the cryptocurrency not only as an opportunity for long-term profitable investments, but also as a major change in the international financial system.

He believes the market will shake up the world of politics, economics and finance.

"Right now we're at a crossroads,"

Corrupt currencies are going to change the world in the same way that the Internet did. ”He assures us that we are entering a new phase in the evolutionary history of wealth.

"The innumerable notes that are being printed by the central banks will become worthless in a few years," he said. It will be the death of the old ways with the advent of new technology.

One of the most popular proponents of bitcoin and cryptocurrencies is Jack Dorsey, CEO of Twitter and Square.

"Bitcoin is going to change everything and it will be for our good," he wrote in a tweet. In another tweet, he said, "Why can't an organization or an individual stop or change this?" ۔ '

Dorsey is so convinced of the corrupt currency that in 2018 he predicted that his bitcoin would be the world's only currency in the next 10 years.

And when the Financial Crime Control Network (FINC) proposed a law in January this year that would require companies to disclose the names and addresses of individuals who have laundered more than 3,000. Dorsey objected to the proposal in a letter.

Shengping is the CEO of Cinziao, the world's largest cryptocurrency trading platform by volume. He warned a few days ago that no institution is capable of destroying the bitcoin and its basic technology, the "blockchain".

I don't think anyone can stop it now," he argued at the Virtual Conference of the Coin Desk Consensus 2021. This technology, this concept, is imprinted in the minds of 50 million people.

Xiao added that governments and regulators should adopt blockchain technology and corrupt currencies, and fighting them would be tantamount to rejecting Amazon's business model in the early 1990s.

Corrupt currencies are not meant to eliminate traditional finance or government-sponsored currencies, but more for "financial freedom."

"They can be a threat to the financial sovereignty of any country."

"The cryptocurrency market has very little wealth and is not yet a threat to the global financial system," Josh Lipsky, director of the Geo-Economic Center at the Atlantic Council,

However, he warned that their rapid growth in just a few months has made the cryptocurrency even more important.

"In a year's time, we could see further expansion in the cryptocurrency market," he said. That's why regulators around the world are wondering what kind of new rules might be needed.

Christine Lagarde, a former director and senior adviser at the International Monetary Fund (IMF), says the biggest threat to cryptocurrencies is that they could "threaten the financial independence of any country."

If you as a central bank do not know how much money has been spent in your country and where it has been transferred, it will affect your monetary policy and the measurement of inflation, interest rates and its enormous implications. are found. Even the way parliamentarians and governments formulate their fiscal policy will be affected.

He added that all countries should be concerned about the threat to financial sovereignty. They can't control how much money is hidden and spent.

Presenting the future scenario, Lipsky believes that governments will create their own digital currencies and compete with the corrupt currencies in the market.

In this context, researchers believe that in order to protect people from counterfeiters and to ensure that the digital currency market should be regulated so that cryptocurrency can be used for legal purposes.

Resistance from governments and central banks

The issue is being debated in the United States.

In mid-April, Jerome Powell, chairman of the US Federal Reserve, the US Federal Reserve, said "these are just speculations."

"The efficiency of our economy depends on people having confidence not only in dollars but also in payment networks, banks and other payment service providers," Powell said.

Federal Reserve Chairman Jerome Powell said he was studying the possibility of issuing digital dollars.

Earlier, Treasury Secretary Janet Yellen called the bitcoin a "speculative asset" and a "highly inappropriate source of transactions."

And a few days ago, Gary Gansler, chairman of the SEC, the top US financial regulator, warned lawmakers that digital currencies pose important policy and investor protection issues. The statement would be seen as tantamount to tightening surveillance under the Biden administration.

"I am ready to work with other regulators and Congress to fill the void left by investor protection in these corrupt currency markets," Gansler said.

Globally, central banks have started talking about it.

The Swiss-based Bank for International Settlements (BIS), known as the Bank of Central Banks, has made it clear that this is a war on corrupt currencies.

"Investors should be aware that the bitcoin can completely lose its value," said Augustine Carstens, general manager of BIS, in late January.

He added that bitcoin is inherently dangerous and only central banks should be allowed to issue digital currency.

A change in the position of Wall Street

Although some people still believe that the cryptocurrencies were issued only for the use of criminals who sell arms and drugs illegally, the sharp rise in their use last year has made it an investment tool. Has been widely recognized as

With each passing day, big companies such as Goldman Sachs, JPMorgan or Morgan Stanley have opened their doors to cryptocurrencies.

In fact, Morgan Stanley became the first major US bank to offer its customers access to bitcoin funds in mid-March.

In late May, Matthew McDermott, head of digital assets at Goldman Sachs, announced that "the bitcoin should now be considered an investment asset."

"It is rare for us to witness the beginning of a new East class," he added.

People who aren't too passionate about cryptocurrencies include Raymond Deleu, founder of Bridgewater Associates, the world's largest venture capital fund.

He told a business conference in late May that he had "some" bitcoins, but also warned that governments had the "ability" to control corrupt currencies.

Other investors, such as Kathy Wood, founder of Arc Investments, insist the authorities "can't stop them."

One of the critics of cryptocurrency is Larry Funk, CEO of Black Arc, the world's largest asset management company.

He says his firm is following the evolution of the market, but it is too early to say whether this is just a speculation.

What is no secret is that the companies that have invested the most in cryptocurrencies have formed teams specifically to analyze the behavior of this market, and these companies have a global presence. The epidemic saw extraordinary growth.

Extreme fluctuations

The fact is that the bitcoin on the one hand is very unusual and on the other hand its fluctuations are quite sudden.

Within the past month alone, it has lost half its value due to two dramatic declines.

First, in mid-May, Tesla CEO Elon Musk sent a message announcing that he would not accept bitcoins as a means of paying for his cars due to fears of environmental pollution. ۔

The reasoning behind his statement is that the new bitcoin generation is powered by powerful computers and requires a huge amount of energy to run.

And the problem is that most of this energy comes from fossil fuels that harm the environment.

The second blow came a few days later when the Chinese government imposed new regulations on its transactions.

It dropped to 30 30,000 but rose again in the coming days.

"A new economic era is near"

If the speculations and fluctuations of corrupt currencies are forgotten for a while, the question arises as to how profound the change that will result from the final adoption of these currencies can be.

Among Bitcoin's toughest defenders, the so-called "corrupt evangelists" are people with different political ideologies, from the most conservative to the most rebellious and anti-establishment.

Steve Forbes, president and editor-in-chief of Forbes Media and two-time Republican primary candidate, is excited about this.

"A great story is being told that will shake up the world of politics, economics and finance," he said in a podcast. That is, governments and central banks try to crush digital currencies with taxes and regulations.

"Politicians and the central bank will work hard to protect their economic monopolies," he added. In the end, those who impose a financial monopoly will be defeated.

"Whether for our good or bad, a new economic era is approaching."

That new era, if it ever begins, will change modern financial systems.

The model developed by Bretton Woods after World War II, which included the system in which the currency was valued at gold reserves, and the current system, built in 1971, where exchange rates fluctuate in the exchange market. Is done.

Believing that corrupt currencies will change the financial system that has ruled the world for the last half century is a big claim.

Although changes may occur, experts agree that the current economic system is more likely to evolve in response to new balances of world power (such as the vertical boom of the Chinese economy) and technological innovation. Blockchain technology is also included.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2021 Noman Hafeez

Comments

Miebakagh Fiberesima from Port Harcourt, Rivers State, NIGERIA. on June 09, 2021:

Everything about bitcoin is shred in secret and mystery. Only a few are in the know. How traditional monetary system works is well known. Blockchain bitcoin cannot in any way overtaken the world's economic system.

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