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Here’s why Bitcoin will boom in the “biggest overhaul” of finance

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The development of Central Bank Digital Currencies (CBDC) has blossomed in the past few years, with countries like China in the advanced stages of its digital Yuan and Japan, Korea, and the US in their research phase for their respective fiat currencies.

However, this presents a concern for the inclusivity of decentralized cryptocurrencies like Bitcoin and Ethereum in the current financial system. Nation-states have not yet made any strong regulations to adopt Bitcoin, but are taking steps to roll out their own centralized currencies.

But according to one trader, CBDCs

might be the “biggest overhaul” of the global financial market, one not seen since the Bretton Wood international conference in 1944 that set the stage for all economic and financial policies ever since.

He also says they’re good for Bitcoin.

The rise of CBDCs

Raoul Pal, ex-Goldman Sachs head of equity research and currently the CEO of Real Vision, said in a tweet Sunday that CBDCs were inevitably coming alongside massive stimulus and monetary policies.

Pal noted that Mark Carney, former governor of the Bank of England, earlier called for a rejig of the financial system and “set the course for a new system.” This point, noted Pal, is the center of discussion (alongside digital currencies) in an International Monetary Fund conference scheduled for Monday.

In fact, an IMF survey on social media giant Twitter on Sunday showed the current populace is betting on digital currencies as a means of money transfer in the next five years. Over 80% of all respondents choose digital money ahead of cheques or cash.

Pal added on the benefits of digital currencies in the regard:

“They allow central banks to circumvent the banking and fiscal system and give or take money (tax or transfer payments) directly. That completely changes monetary vs fiscal policy forever. Central banks will now be able to manage fiscal policy, outside of government balance sheets.”

Pal further stated that “the key part here outside of a totally revolutionary way to collect taxes, give incentives and overhaul the entire system is an implicit agreement at IMF level that central banks can run unlimited balances sheets if they combine forces.”

He also added that the move away from the dollar towards a basket of currencies (the idea envisioned by Facebook in Libra,” leads to avoid single countries getting penalized via FX.

Bitcoin primed for upside

With all the above points in mind, Pal stated that Bitcoin and gold will serve as a solution to circumvent the system of ever-lower value. “It also creates incentive systems for other nations to opt into a hard currency system to attract capital,” he noted.

“Right now, the positive impact on Bitcoin and gold is extraordinary. Regulation globally is opening up to acceptance.”

Meanwhile, Pal stated “Bitcoin is protection” and is poised for spectacular growth in an uncertain era.

He ended, “I’m #irresponsiblylong and it’s seeming more and more responsible by the day.”

The post Here’s why Bitcoin will boom in the “biggest overhaul” of finance appeared first on CryptoSlate.



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