The Turkish government has made a clumsy move to prevent its people seeking refuge against a weak lira (its exchange rate has fallen from €0.45 in 2012 to €0. 10 now), by banning bitcoin, a useless decision criticized by the main opposition party that has caused a temporary fluctuation in the value of bitcoinprompted by the nervousness of those who do not understand that the cryptocurrency is here to stay and is resistant to any government’s control. One more sawtooth — we can expect more in the coming months as the price discovery process continues, which will prompt further speculation about bitcoin’s volatility.
At the same time, China, which tried to ban bitcoin but is now taking a much more progressive attitude that can be seen in the recent statements of the governor of the People’s Bank of China, referring to the cryptocurrency as “an investment alternative”. The idea is to combine fears of a price setting phase in which speculative movements may occur, with the increasingly clear evidence — interest from more and more institutional investors, purchases by large companies or Coinbase’s IPO— that make its value proposition increasingly clear.
Finally, the United Kingdom is setting up a task force to study implementing a digital currency (a Central Bank Digital Currency, or CBDC) by the Bank of England, as the official currency for use by households and businesses, and which would coexist with cash and bank deposits, along the lines of the digital yuan that China has been working on for some time. Very little is known about “britcoin”, as the British Chancellor of the Exchequer Rishi Sunak called it, but which coincides with similar moves not only by the European Central Bank, which intends to make a decision to launch its own digital currency in the next few months and effectively launch it within four years. Some 86% of the world’s central banks are also exploring the possibility with some urgency, which is being seen not so much as a threat to cryptocurrencies, but as an incentive to their use.
The digitization of money is underway, and I’m not simply referring to electronic means of payment, but to real digital currencies. This is a process of disruption that we should all understand. We can expect a transition phase where there will be many alternatives: digital currencies issued by central banks, by private companies, or other options. And as governments try to arbitrarily use their own digital currencies to gain more degrees of freedom to fix their economic problems, the use of cryptocurrencies — with bitcoin set to play a central role — will increasingly look like the most logical option for everyone.
Money will be digital. It’s not a matter of if, but when. Events are moving quickly.