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Pieter Hasekamp, director of the Dutch Centraal Plan Bureau (CPB), responsible for economic published an essay on Friday calling for an outright ban on Bitcoin.
In the essay titled “The Netherlands must ban bitcoin,” Hasekamp comes up with an extensive list of reasons why the Dutch government should enforce an immediate total ban on mining, trading and holding Bitcoin. The director says that by taking his advice Bitcoin’s price will plummet because is “has no intrinsic value and is only valuable because others may accept it.”
The official cited a common anti-crypto narrative, arguing that any cryptocurrency is unable to fulfill any of the three functions of money: a unit of account, means of payment and store of value. He also cited other common anti-Bitcoin arguments, such as security concerns, risks of fraud and scams, and played the card that crypto is useful for criminal actors.
Hasekamp believes that the Netherlands has been lagging behind countries that have moved to “curb the crypto hype” in recent years. He said:
“Dutch regulators attempted to tighten up the supervision of trading platforms, but without much success. The Central Planning Bureau pointed out the risks of crypto trading in 2018, but concluded that stricter regulation was not yet necessary.”
Hasekamp also referred to Gresham’s law, a monetary principle that states that overvalued currency, or “bad money,” tends to drive a legally undervalued currency, or “good money,” out of circulation. Hasekamp called Bitcoin “bad money” and argued that Gresham’s law could work the opposite way with Bitcoin:
“Cryptocurrencies demonstrate all the hallmarks of ‘bad money’: unclear origin, uncertain valuation, shady trading practices. […] Is Gresham’s law back? No, on the contrary. Cryptocurrencies are not used in regular payment transactions. […] Bad money disappears from circulation because nobody wants to accept it anymore.”
The online crypto community is in disbelief about Hasekamps lack of understanding, not only of crypto but to what really constitutes to real and sound money. With Bitcoin becoming more of a threat to traditional finance, central banks and governments are expected to take a tougher stance and try to do all they can in order to stop Bitcoin’s adoption. But can they really? And is it not too late now that El Salvador is the first domino piece to drop in a long line, by accepting Bitcoin as a legal tender?