This week, the Swiss National Bank held its Cryptoassets and Financial Innovation conference. A thought-provoking keynote explored whether fiat money could be challenged. If so, could it be usurped by gold, Bitcoin, some inflation-linked token or something else?
The talk was presented by economist Lawrence H. White, a Senior Fellow at George Mason University and a senior scholar at the Cato Institute. During the speech, he revealed he’d crossed paths with Hal Finney and Nick Szabo, who some believe are Satoshi Nakamoto, the creator of Bitcoin.
With rampant inflation in the 70s, economists devised various proposals to address the issue. One was to impose constraints on central bank policymakers. Hayek observed the problem was a need for more competition. Initially, he suggested opening up economies to foreign fiat currencies, effectively creating competition between central banks. Later he proposed introducing private currencies, which probably would be designed to maintain purchasing power.
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