Due to the growing interest in the Bitcoin digital currency, a research consultant for Canada's central bank decided to imagine a world where the monetary system was based on the emerging cryptocurrency; interestingly enough, it would resemble the gold standard and would seriously damage central banking as we know it.
Bitcoin is a decentralized form of digital currency, created and held online all over the world. The cryptocurrency is used to buy things electronically.
“Suppose that the use of Bitcoin has grown to such an extent that it has replaced existing fiat currencies and has become the predominant medium of exchange or at least the backing for the predominant medium of exchange in a large group of countries,” Warren Weber writes in his 37-page paper on the issue entitled “A Bitcoin Standard: Lessons from the Gold Standard”.
“I will call a monetary system the Bitcoin standard, because such a monetary system will very likely be similar to the gold standard,” the author suggests.
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