Central Banks, Financial Institutions Now Take Bitcoin Seriously<\/strong><\/h2>\nRecent studies and research from central banks indicate that Bitcoin is redefining finance. While these papers don\u2019t mirror the ideas and thinking of policymakers at these institutions, they give us insight into how the industry sees Bitcoin. Some recent policies, including the IMF 2022 Argentina bailout recommendations, include a few anti-cryptocurrency provisions.<\/p>\n
Bitcoin\u2019s continued popularity is now becoming an obstacle for many central banks in their efforts to create monetary policies. One of the main aims of Bitcoin\u2019s supporters is to offer the public an alternative financing landscape free from the direction, if not, clutches of banks.<\/p>\n
Featured image from Dall-E, chart from TradingView<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Bitcoin, the world\u2019s top cryptocurrency, is designed to act as a money or payment option outside anyone’s control. Using the crypto, which is decentralized and peer-to-peer, removes the involvement of third parties, like central banks. This Bitcoin promise has redefined the financial landscape, helped the unbanked, and empowered those who want independence. However, the ecosystem has its share of critics, including central banks. Related Reading: Floki Inu Warning: Analyst Says \u2018Prepare For The Crash\u2019 \u2013 Details Central banks’ role shrinks as the Bitcoin ecosystem grows and its use cases expand. This prevailing belief is validated by a growing amount of research from financial institutions and central banks that assess Bitcoin\u2019s disruptive nature. The ever-increasing narrative focuses on Bitcoin\u2019s role in promoting inequality and its potential to disrupt central banks\u2019 policies. The Role Of Bitcoin In Distributing Wealth One subject of central banks\u2019 studies highlights Bitcoin\u2019s role in wealth distribution. To help us understand Bitcoin\u2019s role, we look at two papers published by the European Central Bank. The first paper, published after the FTX fiasco in 2022, is titled \u201cBitcoin\u2019s Last Stand,\u201d which sees the top crypto as a failed monetary project nearing its end. But in 2024, when Bitcoin hit an all-time high, the same researchers filed another study, painting Bitcoin positively. The paper argued that crypto can impact wealth distribution, but only the early holders get richer. Since Bitcoin or crypto use doesn\u2019t produce a product or service, the increased wealth of early adopters comes from the reduced consumption of all other members of society. Does BTC Disrupt Monetary Policies? Other finance-related researches look at Bitcoin\u2019s impact on monetary policies. For example, the Minneapolis Federal Reserve argues that when people can hold and use Bitcoin, it is difficult for the state to run budget deficits regularly. Traditionally, the government can just offer bonds in case there\u2019s a deficit in revenue collection. But governments may only spend what they usually collect if there’s Bitcoin. The study suggests two options: one, to ban Bitcoin\u2019s adoption, and two, to tax this asset. In addition to the Minneapolis paper, an IMF policy paper in 2023 highlighted Bitcoin\u2019s effect on monetary policy. The paper argues that Bitcoin impacts a state\u2019s policy, and emerging markets are most vulnerable. As a solution, the researchers recommend strengthening their monetary policies first before banning Bitcoin. Related Reading: MicroStrategy Stock Hits All-Time High As Bitcoin Blazes Past $67,000 Central Banks, Financial Institutions Now Take Bitcoin Seriously Recent studies and research from central banks indicate that Bitcoin is redefining finance. While these papers don\u2019t mirror the ideas and thinking of policymakers at these institutions, they give us insight into how the industry sees Bitcoin. Some recent policies, including the IMF 2022 Argentina bailout recommendations, include a few anti-cryptocurrency provisions. Bitcoin\u2019s continued popularity is now becoming an obstacle for many central banks in their efforts to create monetary policies. One of the main aims of Bitcoin\u2019s supporters is to offer the public an alternative financing landscape free from the direction, if not, clutches of banks. Featured image from Dall-E, chart from TradingView<\/p>\n","protected":false},"author":557,"featured_media":650277,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5651],"tags":[428,1119,1252,6664,1742],"class_list":["post-650274","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin","tag-bitcoin","tag-btc","tag-central-banks","tag-crypto","tag-digital-currency"],"acf":[],"yoast_head":"\n
Bitcoin Potential For Monetary Policy Sparks Growing Interest Among Central Banks<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n