The past few years have seen the growing popularity of social currency in Spain, where ordinary people are ditching the euro and exchanging services and products using an alternative currency.…Sputnik International
Virtual currency bitcoin has been recognized by the German Finance Ministry as a "unit of account", meaning it is can be used for tax and trading purposes in the country.
Bitcoin is not classified as e-money or a foreign currency, the Finance Ministry said in a statement, but is rather a financial instrument under German banking rules. It is more akin to "private money" that can be used in "multilateral clearing circles", the Ministry said.
"We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,"said Frank Schaeffler, a member of the German parliament's Finance Committee, who has pushed for legal classification of bitcoins.CNBC
Correction: an earlier version of this story incorrectly stated that bitcoin was legal tender. The virtual currency has been confirmed as a financial instrument or "private money".
In a note to clients, Colas highlights the merits of Bitcoin for venture capitalists, comparing it to tech success stories like Amazon and Netflix:
Those thousands of tech-savvy folks who run the bitcoin system have created a new and very low cost method for transferring money around the world. For the potential 25 bitcoin reward of solving one of those 10 minute puzzles, they keep track of all the transactions created by users around the world.
The current system for money transfers – banks, brokers and other financial institutions – want a lot more for their efforts than a few thousand dollars six times an hour. Bitcoin is to money what Amazon is to retail or Netflix is to video content – a much more efficient way to meet the needs of millions of people around the world.Colas goes on to say that there are two major issues to overcome. The first is security, which undermines confidence, and the second is anonymity, which attracts government interest. He doesn't see either as insurmountable, although they have to faced and dealt with for Bitcoin to be economically viable as an investment.
For MMT-ers: Woods himself already gives the apt Keynes/Lerner/Friedman/Buiter/Bernanke references. Yes, Friedman and Bernanke too. To be complete: one of the main arguments of Wood is that we are, at the moment, confusing two very important discussions and kinds of policy, one being about the apt size of the government and the other about the level of government debt and deficits. It’s all about priorities: banks or households, dignity or trash can cuisine.Real-World Economics Review Blog
