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Bitcoin Could Fix Turkey’s Currency Crisis

Bitcoin Could Fix Turkey’s Currency Crisis U.S. Global Investors

It’s December 2021, and the Turkish lira is near an all-time low against the U.S. dollar as President Recep Erdogan continues to implement what the Wall Street Journal calls “unconventional economic policies.” Turkish households saw the value of the national currency plunge nearly 30% last month alone, making everything from food to fuel significantly more expensive for already-struggling families.

Like many others, I believe Bitcoin could fix Turkey’s lira problem. And to understand why, it might be helpful to dust off a book written 45 years ago by Austrian economist Friedrich Hayek.

The Turkish lira continues to run down in value USGI, Bloomberg

In the book, Denationalization of Money, the Nobel Laureate makes the case that a government’s monology over money is just as undesirable as any other monopoly. He argues against the creation of a shared European currency—something that would become a reality in 1999 when the euro was introduced—and he proposes that private institutions should be allowed to issue their own currencies.

It’s an idea that Hayek acknowledges is “too unfamiliar and even alarming to most people.” And yet, he says, those same people would eventually learn to see the benefits of a system that allows government-issued fiat currency to “compete for the favor of the public.”

But compete against what? Although written half a century ago, Hayek’s book seems to anticipate the rise of digital assets such as Bitcoin and Ether, which today are the closest thing we have, other than gold and silver, to “denationalized” money.

Austrian economist Friedrich Hayek (1899-1992) U.S. Global Investors

“When one studies the history of money, one cannot help wondering why people should have put up for so long with governments exercising an exclusive power that was regularly used to exploit and defraud t...

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