A Digital Dollar Is a Double-Edged Sword That Could Accelerate Bitcoin’s Adoption
The idea of a digital dollar as a monetary stimulus is resurfacing.
The world is on the brink of a great economic crisis. In this difficult context filled with uncertainty, the United States is doing its utmost to try to save the current monetary and financial system. The Federal Reserve has taken the first step by announcing a massive quantitative easing program with an injection of $700 billion in liquidity on Mars 15, 2020.
Wall Street’s rejection of this first monetary stimulus led the Federal Reserve to change its tune. From bazooka, the Federal Reserve went nuclear. Just eight days after its first announcement, the Federal Reserve announced on March 23, 2020 that it would begin an emergency program of unlimited quantitative easing.
You read that correctly. The Federal Reserve is now prepared to do whatever it takes to save the current system. In terms of numbers, the bill for this cash injection could exceed $6 trillion. This is a staggering figure that will instantly add up to the Federal Reserve’s balance sheet.
The Federal Reserve’s M2 Money Stock could increase by 40% in the space of a few weeks. It would go from $15T to $21T. Such an increase would de facto constitute an unprecedented currency devaluation of the U.S. dollar.
As a reminder, the M2 Money Stock had taken 10 years to go from $8T to $15T:M2 Money Stock evolution since 1985
With the economic crisis we are about to experience, an increase of the same amount would be achieved in just a few weeks. We are therefore really facing a new situation.
All these measures decided by the Federal Reserve have one thing in common: they are all aimed at saving the current system by helping the financial markets, the banks and U.S. companies.
In this context, many voices are being raised in the United States to explain that the majority must not be forgotten in...