Financial institutions and central banks have studied and published reports in regards to bitcoins and the digital currency industry. For years, the banking community has attempted to transfer currencies into digital and eliminate the need for cash entirely. This is why bitcoiners have become useful for this reason, according to the Financial Times.
Izabella Kaminska, an author at the financial news organization, published an article late last month looking at how central banks across the globe might actually be using bitcoiners for their own purpose. It has only now started to make the rounds on the Internet.
The author of the piece, which has gained both praise and staunch criticism in the past week or so, explained that the bitcoin developers and proponents are essentially performing free, unpaid and voluntary research and development for central banks and financial establishments “since you are debugging and building legitimacy for one of their fond projects.”
The concept of a cashless society has been foretold in science-fiction novels, depicted by cynical minds who have been terrified of the future. For those who have been long opponents of the idea of not having cash and only relying on chips and technology to pay for milk, bread and rent, bitcoin has perhaps created favorability into such a system.
“This is important because, in the current economic climate, the introduction of a cashless society empowers central banks greatly,” wrote Kaminska. “A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.”
Kaminska goes on to write that a higher negative interest rate would mean a bigger reward for individuals to hold alternative currency:
“The greater the incentive to hold alternative coins, the greater the incentive to produce them. The greater the incentive to produce them, the greater the chances of oversupply and collapse. The more sizeable the collapse, the more desirable the managed official e-money system ultimately becomes in comparison.”
Are bitcoins and its promoters just tools of the central banks and banking establishments? In a world where the Federal Reserve is the most powerful organization, nothing is surprising anymore.
Imagine for a moment if the federal government or the Federal Reserve was launching a digital currency that would be completely decentralized. Would libertarians and the anti-government crowd support it entirely? It’s quite doubtful considering the contempt that we hold for the monster.