In Greece, the former finance minister, Yanis Varoufakis, came forward and voiced his sentiments about the world’s leading cryptocurrency. By an open letter published on July 27, Yanis Varoufakis stated that Bitcoin’s substitution as fiat currency would not be a good idea, since the crypt would only make “capitalism uglier, nastier and more dangerous for humanity.”
Yanis Varoufakis served as Minister of Finance in the Greek Government for a period of five months from January to August 2015. Greece was in charge of the finance ministry and faced a massive financial crisis to the extent that it was unable to provide a €1.6 billion loan from the International Monetary Authority. Nevertheless, the ex-finance minister is now using his experience and knowledge to deliberate on whether bitcoin can replace cash.
Greek Ex-Finance Minister unconvinced by Bitcoin
Through the letter, Varoufakis argues that Bitcoin cannot adapt and react to the many economic problems, citing the novel coronavirus pandemic. He stated that Bitcoin’s monetary policy is programmed; hence it is difficult to alter.
Furthermore, Bitcoin’s scarce supply, which stands at 21 million, is unlikely to change soon anytime. The supply cap coded into BTC ensures that its supply is developed at a steady speed that is automatically slashed every four years by 50 percent. BTC is incapable of adding to its supply; however, experts claim it is an excellent mechanism to curb its supply and maintain value.
Additionally, Yanis Varoufakis pointed out the uneven distribution of BTC as one of the reasons it should not substitute fiat. According to him, the majority who holds a lot of BTC is not impressed by the idea of adding to their holdings, since this will depreciate the value of their crypto asset. This proves to be a problem since the rich naturally tend to hold onto Bitcoin at the expense of public interest, creating an inadequate wealth distribution and more so during crises such as the COVID-19.
Varoufakis backs blockchain technology
Although the ex-Greece finance minister believes that the adoption of Bitcoin will make the world worse, he believes that blockchain is an exceptional technology. The former finance minister highlighted while Bitcoin might not be the solution to capitalists, blockchain technology might play a very vital role in developing a new form of the financial system.