Greece has never been accused of being an economic savant over the last generation. Using the Drachma for the 3rd time from 1951 to 2001, it’s value declined to the point where Greece joined the E.U.’s new multi-national Euro system in 2002. Greece followed up with three distinct recessions in each year from 2007 through 2009. This required a massive bail-out in 2010, and “austerity measures” ever since for the citizens to live up to, while the bankers who caused the issues continue to mismanage the economy unabated, asking for more loans as we speak.
These consistent economic issues have lead to the new regime change in Greece, lead by new motorcycle-riding leader Yanis Varoufakis. He vows to bring change to the people of Greece. Doesn’t that sound familiar?
Dating back to 2013, Varoufakis has made many statements about what he believes Bitcoin can and cannot do economically. He has not been impressed by Bitcoin as a way forward for a sovereign nation’s economy.
“There can be no de-politicized currency capable of ‘powering’ an advanced, industrial society,” said Varoufakis. “What is, however, genuinely novel and unique about Bitcoin is that no ‘one’ institution or company is safeguarding the so-called Ledger. The record of transactions that ensures that, when you have spent one unit of currency, there is one less unit of currency in your (digital) wallet.”
Also read: Greece May Soon Exit The Eurozone – A Role for Bitcoin?
Varoufakis’ views as the new Greek leader are important, even if Greece is tied to the Euro like a ball-and-chain. The E.U. is doing so well economically that they are starting to implement the “Quantitative Easing” policies that the U.S. has hidden behind for the bulk of this economic malaise. Also, negative interest rates for banks are beginning to take hold, another sign of the dire straights rampant in the region. Greece is always looking for help these days, and it may be unwise to look this gift horse in the mouth, but accept more debt from the E.U. instead.
“In a sense, the designer of the Bitcoin algorithm (the delectable Mr ‘Nakamoto’, who has, by the way, dropped off the radar some time ago) seems to have designed the new currency on the basis of faith in the crudest version of the ‘monetarist’ Quantity Theory of Money (the idea that the value of money depended solely on the quantity of money supplied to the public) and, thus, aimed at creating the digital equivalent to… gold.” , according to Varoufakis in 2013.
So you can see he is not overly enamored with the idea of Bitcoin going mainstream on a national level. Honestly, I agree with him, at least as far as Bitcoin’s development to this point. It is not ready to run national economies, nor was it designed for that role. What is important is that this does not color his view of Bitcoin in general, and damage future regulations and freedoms it affords the public. At some point in the future, Greece will have to choose if they are friends or foes with Bitcoin. Bitcoin has much more potential for growth economically than billion-dollar debts and negative interest rates.
Considering the fact that Greece no longer has a sovereign national currency, only the Eurozone’s Euro, that should make Bitcoin less threatening domestically. They don’t have a local currency to defend, and they can use the influx of business and investment new Bitcoin industries can provide going forward. Economic growth and high-end jobs are legion in the growing Bitcoin space, and those countries that make nice with the digital currency through regulation can win big, long-term if they play their cards right.
Varoufakis may not be a big fan personally, but maybe the people he governs can help him see the light. History tells us the Greek government is no savant when it comes to building the economy from the inside-out, and could use all the advice they can get. The Euro is starting to look more like the Drachma more and more every day.
Would you count Greece as against Bitcoin based on Varoufakis’ recent views on Bitcoin? Share above and comment below.