Since the historic subprime crisis in 2008, a new monetary value system has been found alongside the traditional monetary system and its institutions. Its development is exceptional since the new scriptural currencies take an increasingly important place within the world economic sphere. The one that is talked about the most is undoubtedly Bitcoin. Recognized in the world of hi-tech investment, does bitcoin represent a threat to our banking system?
How bitcoin works
Bitcoin is a fictitious currency created in 2009 by a team of web developers known under the pseudonym Satochi Nakamoto. Since then recognized by economic players around the world, it has gradually become a full-fledged monetary unit. Thanks to the internet, this system does not need an institution for the creation of money and the financial transactions carried out between the different users of bitcoin. Its operation in complete autonomy guarantees it independence vis-à-vis institutional monetary systems.
Monetary creation and regularization are supported by those over-appointed by minors. If their role is to regulate bitcoin transactions, they have limits. Indeed, the creation of bitcoins is capped over time at 21 million, a volume that should be reached in 2140. It is therefore an exhaustible resource, which generates a lot of speculation. Indeed, the rarer a currency, the more it attracts the greed of investors. To acquire bitcoins, it is necessary to have fairly advanced computer knowledge. Indeed, if many platforms allow the purchase of bitcoins, it is advisable to deposit them on a secure interactive medium. Therefore, this currency remains reserved for connoisseurs. Moreover, most transactions made in bitcoins are for the benefit of Fintech. That is to say that bitcoins finance companies based in the field of new technologies.
Bitcoin, what are the risks for the real economy?
The international financial authorities are particularly skeptical with regard to this monetary revolution. Thus Ewald Nowotny, member of the commission of the European Central Bank, publicly refuted bitcoin at the beginning of the year as being a currency. He qualifies the bitcoit as a speculative instrument which must be the subject of regularization by the authorities. It is true that the independence of this exchange currency poses a fiscal problem given that to date bitcoin transactions escape state taxation. It is therefore a shortfall for the institutions which should not delay in solving this problem.
In addition, the transactions being anonymous, bitcoin is a preferred means of financing for players in the underground economy. It is therefore a real threat to the fight against corruption and illegal activities in the world.
Finally, on the money market, bitcoin is characterized by a high volatility of its value. It is important to note that the price of bitcoin has multiplied by 16 between the beginning and the end of 2017. This strong speculation risks giving rise to a speculative bubble around this value. As it finances real assets, this is a considerable risk for the global economy, which remains very marked by the economic crises of 2007 and 2011.