'Netherlands must now ban bitcoin' - Central Planning Bureau
(Kitco News) - Warning that cautious regulation can backfire, Netherland's Central Planning Director said Netherlands must act fast and ban bitcoin now.
He writes that cryptocurrencies are crippled as a money replacement since they perform much worse than government money on all counts. He ticks off money's general qualities that make it useful as a currency: unit of account, means of payment and store of value.
"There is no value retention [with cryptocurrencies]. Ease of use suffers from a lack of acceptance and security is undermined by outright scams. Cyber ??transactions only score well on the aspect of privacy – and that anonymity is exactly what makes them attractive to criminals," writes Hasekamp [translated from Dutch by Google Translate].
Unable to properly function as a currency, Hasekamp said cryptocurrency solutions are oversold, and a crash is inevitable when promises can't be fulfilled.
"Cryptocurrencies are...unsuitable as a unit of account and means of payment outside the criminal circuit; its use as a store of value is based on the hope that cryptocurrencies will one day replace real money," writes Hasekamp.
"But that's not going to happen. Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a contagious narrative: a contagious story in which people believe because other people believe in it. Gresham's law is replaced by Newton's law: what goes up, must come down. The ultimate collapse of the crypto bubble is inevitable. The following applies to investors and governments: whoever moves last is the loser. The Netherlands must now ban bitcoin."
In May, Macquarie Capital's Head of Asian Strategy and Global Strategy Co-ordinator Viktor Shvets told Kitco worries that a cryptocurrency crash could cause the next financial crisis.