They recognize the value of bitcoin technology and its privacy.
They highlight the survival of cryptocurrencies, despite the bans.
For the panel of Argentine economists who debated at the Decentralize AR 2020 event around the characteristics and operation of Bitcoin, it is difficult for the cryptocurrency to become a currency in current use.
The idea was shared by specialists Diana Montino, Fausto Spotorno, Agustín Etchebarne, Iván Carrino and Francisco Gismondi, who participated in the virtual event, held from July 30 to 31 and organized by the NGO Bitcoin Argentina.
The economist and professor at CEMA University in Argentina, Diana Mondino, started the debate by pointing out that, in her opinion, cryptocurrencies cannot be considered coins or bills. This is because they do not meet any of the characteristics of this type of asset, such as a unit of account, a medium of exchange and a store of value.
“Bitcoin meets almost none of those characteristics,” says Mondino, adding that in any case, cryptocurrencies could be considered to be a financial asset that allows, at times, to reserve value.
His opinion was shared by the other economists on the panel. Agustín Etchebarne, director of the Think Tank Libertad y Progreso, based in Buenos Aires, endorsed the idea. For the economist, bitcoin cannot be a store of value because of its volatility.
“The rise and fall of the price does not allow stability. So I consider it to be only a speculative asset. It is not currency. It cannot be used as a unit of account and is not used as a medium of exchange, “says Etchebarne.
However, the specialist gives cryptocurrency great technological value, highlighting the contribution of this innovation to privacy.
For his part, Iván Carrino, deputy director of the Economic and Political Master of the ESEADE University Institute, also in Argentina, emphasizes the issue of bitcoin’s volatility and agrees that it cannot be considered a currency.
“If bitcoin had been the currency of course in these five years, the economy would be moving between hyperinflation and hyperdeflation, taking into account the sudden changes in the price of the cryptocurrency, “says Carrino. He adds that price stability is essential for bitcoin to become a unit of account.
Carrino also notes a contradiction in the expectations of bitcoin users.
“On the one hand, they want it to be a currency of use, but on the other, they want to secure its future with sudden price rises. It cannot possibly be converted into currency if the price suddenly goes from $ 11,000 to $ 300,000, as many aspire, with the desire to make big profits. But then, you can lower the price unexpectedly. Those changes should be gradual for the currency to work. ”
The fiat is also not stable
Mondino remembers that fiat currencies are also not totally stable. “The devaluations that many national currencies are suffering are proof of this. At the bottom, currently no currency, nor cryptocurrencies, is totally stable and that is one of the great challenges facing the world economy. ”
Carrino argues that there must be some stability. “Many of these devaluation processes are gradual and take years, they are not so drastic,” he insists. Nor does it easily see that you can make massive payments or grant credits with bitcoin, due to volatility.
Etchebarne supports the approach, stating that with those ups and downs it is not possible for cryptocurrencies to allow people to reserve value.
Bitcoin could reach stability
Economist Francisco Spotorno, director of the OJF Center for Economic Studies, intervenes to describe bitcoin as a commodity (a good that is marketed because there is a demand in the market).
In his opinion, only stability will allow the cryptocurrency to become a currency of use. He believes that some of the existing crypto assets will be able to achieve that stability.
“If among the thousands of cryptocurrencies that coexist, some manage to stabilize their price they may become a unit of account“Says Spotorno. Although there is still a long way to go, according to Agustín Etchebarne.
The debate moderator, Gonzalo Blousson, co-founder of the blockchain platform Signatura, participates to highlight the decentralization and disruption of Bitcoin in the current financial system.
He spoke of the revolution that the new scheme has generated, which breaks the known models and that has empowered users by giving them control of their money. He pointed out the decentralization, privacy and transparency properties of the blockchain. He also cited difficulties in regulating this new technology, which works independently of governments.
The role of regulation
The intervention of economist Francisco Gismondi, former director of the Argentine Central Bank, focuses on the vision that regulators have about cryptocurrencies.
Regarding this, he says that, given the growing interest of people in cryptocurrencies, regulators felt fear. “First they saw it as something very risky. Also like a threat to the monopoly of central banks to issue money“
He adds that the fear was decreasing and due to the analyzes carried out within the Group of 20, an intermediate vision was achieved, by fitting the cryptocurrencies within the FinTech movement. “So it was more positive if it was seen as financial innovation.”
Gismondi explains that there are several types of regulation, some more taxable and others based on security. For this reason, some countries have established bans on cryptocurrencies. However, “the great power of Bitcoin is that continues to exist and have value for people, despite those controls and prohibitions“
That has generated two islands: the traditional economy and the economy that works around cryptocurrencies, says the economist, highlighting the fact that each one works on its own side.
Regarding whether Bitcoin can substitute the role of central banks and the probability that a cryptocurrency-based economy exists, economists do not see how Bitcoin’s operating model could fulfill the role of these organisms. Therefore, would be more in favor of there being a complementation between the two systems.
“You could take advantage of many of the advantages of cryptocurrency technology, without neglecting the role that central banks must fulfill, even when it also has its flaws,” they conclude.