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The big problem facing central banks and cryptocurrency that no one is talking about

16 Apr, 2021

The subject matter here is potentially significant, so trying to condense the theme into a few short lines is not going to be easy. However, and without trying to go into too much detail the issue is as follows. If the central banks in general and the US Fed in particular are not worried about inflation, then they need to wake up. If cryptocurrency takes off as many seem to think it will, and becomes an uncontrolled and unregulated means of payment, then how will that eventually impact the prices of goods and services it subsequently determines. Right now global cap of crypto is guessed at around $2 trillion, but it is rising fast and what happens when it reaches $20 trillion or perhaps $100 trillion. Well, at that stage, if the use of Crypto is so widespread then global central banks will have lost all control of money supply, and the ability to use monetary policy to keep a check on prices. Indeed, prices may well have gotten out of control by that stage. Question is; are these central banks asleep at the wheel or are they just biding their time whilst they come up with a plan to regulate crypto to such a degree that it becomes commercially unviable. I do not know the answer to that, but disruptive capitalism is one thing; imploding the existing monetary order is an entirely different matter

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