“Bitcoin is becoming a danger for the monetary and financial system and for citizens”

Grandstand. Monetary history is shot through with experiments, developments and… throwbacks. Hidden under technical clothes, some “innovations” actually constitute dangerous regressions. This was the case, for example, of the Coinage Act of 1873 in the United States. This law endorsed the abandonment of bimetallism by restricting the monetary use of silver for the sole benefit of gold, supposedly in order to protect the value of the currency. The result was a reduction in the money supply and a great economic depression. Today, a new danger awaits us: the fascination for bitcoin, described as“digital gold”.

For if gold is definitely a “barbarian relic”, according to the expression of John Maynard Keynes (1883-1946) – the yellow metal today only exercises a role of store of value – its version 2.0 is certainly not more useful, but it is well more dangerous. Bitcoin has certainly played a key role in the rise of the blockchain, this digital system of certification and security of exchanges, but it is developing today without it. Apart from this, it becomes a danger for the monetary and financial system and even for the equality between citizens.

Read Stéphane Lauer’s column: Article reserved for our subscribers “Bitcoin is a reminder that trust in money is not immutable”

Let us first recall that in twelve years of existence, an infinite duration in the digital age, it is still only used for a tiny number of non-speculative transactions. In 1945, in ruined post-war Berlin, the cigarette had not taken two weeks to spread to almost all possible transactions. Bitcoin does not finance anything economically and socially useful and does not allow any concerted monetary creation for a specific purpose (such as the financing of ecological transition expenses).

Unlike major payment systems like Visa or Mastercard, its technical interface is anyway incapable of managing several hundred thousand transactions simultaneously. If it wanted to be money, bitcoin has clearly failed. And it cannot be, because of the erratic fluctuations of its course. In terms of monetary alternative, the added value of bitcoin compared to the existing one is zero.

Fiscal and market fragmentation

Would bitcoin serve, at least, as a tool to fight against the weakening of the currency, caused by excessive monetary creation? This is a nice paradox: this speculative asset, essentially living off the expansionist policies of central banks, would be anti-inflationary. However, it only owes the growth of its price to its ability to divert hundreds of billions of euros from the real economy for speculative reasons. It therefore participates in the inflation of financial products, and it is deflationary for the real economy: it is the worst possible configuration for healthy economic development. According to Chainanalysis, nearly 98.7% of bitcoin transactions are for speculation, not transaction.

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