Bitcoin and gold cannot be protected against geopolitical turmoil, according to Yanis Varoufakis, former Greek Finance Minister and Secretary General of MeRA25. “Finding freedom outside of government is a dangerous fantasy,” he said.
Varoufakis is also a doctor of economics and a best-selling author. He spoke with David Lin, presenter and producer at Kitco News.
CBDC and Blockchain
“I don’t believe that…” oligarchic ”in the sense that cryptocurrency like Bitcoin will be replaced [conventional currency]”said Varoufakis.” It shouldn’t, it can’t be done, and it would be a nightmare if it happened. ”
However, he added that blockchain technology would be beneficial for central banks.
“China’s central bank is already releasing a crypto-like digital currency in an effort to circumvent the barriers placed on fiat money by commercial banks, which are sources of financial instability, and the ones that actually create of the buffer zone, which separates people from their money, ”Varoufakis said.
Varoufakis has long promoted a digital currency of the European Central Bank (CBDC).
Responding to concerns that the CBDC is increasing government tyranny, Varoufakis said, “This is a serious concern. The concentration of power is never a favorable moment for freedom. So, I accept it, but in same time I reject it because there can be no apolitical money … The only thing that gives value to money is the ability of money to kill taxes.As far as we live in states that do things for us , in our name, sometimes against us, but still, we are like fish that cannot live in water.We are citizens of states… we need those states.I mean, look at all the attempts of the libertarian who created the floating islands in the Pacific.
He added that the solution to government tyranny is democracy and transparency. “To those who say the government can be dictatorial and limit freedom, I say yes to them,” Varoufakis remarked. “That is why we need democracy. So, for example, I am an advocate of using blockchain technology, in the context of central bank digital currencies, to provide some level of transparency so we all know how much money is in the system.
Or, bitcoin and inflation
Regarding the claim that gold and bitcoin are hedges against government turmoil, Varoufakis replied: “[It’s] just pure idiocy … You have to control the money supply. The idea that the money supply should be independent of politics and government is… very dangerous.
He needs to explain that in times of crisis, the central bank must make money available to prevent a depression.
Varoufakis responded to statements that loose monetary policy could curb inflation. “Financial ignorance,” he said. “… The reason why we have inflation today is not because of QE. This is for two reasons. first, due to disruption of supply chains. You had a lockdown, which essentially dismantled the supply chains of globalized capitalism … The second reason you had a time when increasing demand for goods … coincided with the restriction on the supply of these things due to disruption of supply chains. And that ordered the inflationary spiral.
For how Varoufakis thinks central banks can fight inflation and how the Russia-Ukrainian conflict should be resolved, watch the video above.
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