Influential Historian Urges Joe Biden to Bring Bitcoin Into Financial System
As China is leading the central bank digital currency (CBDC) race and the United States has taken a back seat, Niall Ferguson, an influential economic historian, suggested President-elect Joe Biden consider leapfrogging the crowd and going straight for the score by integrating BTC into the US financial system.
“Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the US financial system — which, after all, was originally designed to be less centralized and more respectful of individual privacy than the systems of less-free societies,” the former BTC critic and Milbank Family Senior Fellow at the Hoover Institution wrote in an op-ed published by Bloomberg today.
Ferguson was named one of Time magazine’s 100 most influential people in the world in 2004 and has written a handful of books. His most popular work to date is "The Ascent of Money: A Financial History of the World" which was published in 2008 and examines the history of money, credit, and banking.
In the op-ed, the historian further made the point of global economies moving toward cashless societies, saying “the financial data of law-abiding individuals is better protected by Bitcoin than by Alipay, [a major Chinese payments platform].”
Ferguson pointed to BTC’s key feature — scarcity — as overshadowing any of what he described as “defects,” not the least of which are relatively slow transaction times, costly transactions at centralized exchanges like Coinbase and high energy consumption.
“The advantages of scarcity are obvious at a time when the supply of fiat money is exploding,” he said.
According to Ferguson, “We are living through a monetary revolution so multifaceted that few of us comprehend its full extent,” one whose evolution has been hastened by the COVID-19 pandemic as it has “accelerated our advance into a more digital word” and “significantly increased our exposure to financial surveillance as well as financial fraud.”
There is support for this argument among investment circles.
Laurenz Apiarius, Managing Partner at Blockwall, a blockchain venture capital fund, said in a recent Coinscrum podcast that big investors are are talking an interest in the firm’s equity fund, saying:
“This is what COVID-19 has tremendously helped with. They want to be invested in one of those exponential technologies that they’ve researched about, and they want to have an allocation in.”
Meanwhile, Dan Tapiero, founder of DTAP Capital, observed the importance of Ferguson’s advice to Biden in a tweet, suggesting that it would also capture the attention of billionaire hedge fund manager Ray Dalio, who is not sold on BTC, as an “effective currency.” Tapiero said,
“It's a very bold call from him that I didn't expect. He is Harvard/Stanford super well respected and Establishment. … He will get the Davos guys all whooped up. Maybe Ray [Dalio] ends up calling on [Niall Ferguson].”
However, while it’s unclear how Biden feels about BTC, he has made one thing certain so far, by confirming his pick for Treasury Secretary nominee — former Federal Reserve (Fed) Chair Janet Yellen. Morgan Creek Digital Assets Co-Founder Jason Williams illustrated Yellen’s evolving views on BTC, which started out with total avoidance and turned into acknowledging that she is not a fan in October 2018. Yellen is, however, a fan of blockchain, and a great deal has changed in the crypto landscape since she last weighed in, with the Fed now eyeing a digital dollar.
Roubini vs. St. Paul
After some of Bitcoin’s harshest critics have turned a corner, and with the BTC price now boasting a new all-time high, more of those critics are changing their mind. Ferguson is also a former BTC basher who backpedaled on an earlier statement that bitcoin was a “complete delusion.”
Today, he also pointed to his economist peer Nouriel Roubini, who is infamous in cryptocurrency circles for his disdain for bitcoin. Ferguson observed a change in Roubini’s critique of BTC, from the “biggest bubble in human history” and “the mother of all scams” a couple of years ago to “maybe a partial store of value, because … it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time” today.
Ferguson quipped in a one-two punch,
“If I were as fond of hyperbole as he is, I would call this the biggest conversion since St. Paul.”
However, as a recent Twitter thread by Roubini showed, ‘the biggest conversion’ might still be in progress:
At the time of writing (19:32 UTC), BTC trades at USD 19,274 and is up by almost 7% in a day and 5% in a week. The price rallied by 40% in a month and 162% in a year.
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