Australia may be the most intense hotbed of Bitcoin activity on Earth. Followers of this website have seen this country run the gamut on Bitcoin acceptance and public consumption. Some Australian cities are ready to run with Bitcoin as their primary, as our article on Tasmania’s Launceston revealed.
As I reported just days ago, Australia is ready to access fiat currency-based Good and Services Taxes (GSTs) upon Bitcoin. Australian residents have also paid tens of thousands of dollars in bills with Bitcoin. Now, the Australian government is prepared to have a “Senate inquiry” on the role of digital currency in Australia’s financial future.
Australian Senators: Is this the End of National Currencies?
Matthew Canavan (Queensland senator for The Nationals) and Sam Dastyari (Labor senator for Australian NSW) are spearheading this exploration into Bitcoin and digital currency today in Canberra. Maybe it will be fashioned much like the recent committee hearing in Canada, where Bitcoin oracle Andreas Antonopoulos held court on the education and future opportunities Bitcoin can provide, if handled with care. It does not look like Andreas will grace the Senate committee with his wisdom at this time.
“The emergence of Bitcoins and other forms of digital currency could revolutionize money markets. If the competition is so good in markets for products, why shouldn’t we allow competition in markets for currency too?” query Canavan and Dastyari. “The short-term benefits of printing lots of money are as enormous as you want them to be, but the long term costs of inflation and loss of reputation are devastating.”
The powerful title of their recent op-ed piece in the Sydney Morning Herald seems highly indicative of their mindset when it comes to “The Future of Money.” The first country that truly welcomes Bitcoin as a legal tender currency may take some initial risks, but through its anti-inflationary design, may enrich the users for years to come. Can Bitcoin handle the potential demands of a major nation like Australia in the near future? Who knows? As Ford has done with its best-selling F-150 pick-up truck, deciding to go to a pure aluminum construction, maybe the best way to find out is to jump in with both feet. Betting the farm on a totally new construction paradigm is certainly risky. Or a more prudent way forward is to let a smaller country try it out as a beta test, which will happen eventually.
Of course, no one is suggesting that Australia is getting ready to welcome Bitcoin to the standing of their Australian Dollar with open arms. The beginning of that notion is officially on government’s table as we speak. Canavan and Dastyari posit the look forward thusly:
“There is no reason why more competition and choice in money markets can’t deliver the same kind of benefits that more competition and choice have delivered in product markets: greater stability, greater choice and ultimately better outcomes. Even if it means giving up some of their powers, governments should be taking the emergence if digital currencies seriously.”
Is Bitcoin flat out better than the current Central Banking/Federal Reserve/Fiat currency model the world has fallen victim to over the last century? In theory, it can right many of the wrongs currently imposed by an unelected few who govern the production and supply of money. Paradoxically, bitcoins are produced and somewhat controlled by miners, also unelected, independent, privately-funded currency producers. The difference is the amount of bitcoin production is finite, scheduled, and regulated by the Blockchain as a whole, not behind closed doors, without audit or oversight. Bitcoin has necessary checks and balances on a public ledger, whereas the current Federal Reserve system, regardless of locale, has far fewer than needed. The only checks seem to be cut to their private shareholders, at 6% annually (At least in the U.S.. Your rates may vary). These Senators brought up “competition”. What does that tell you?
Bitcoin’s Blockchain has numerous advantages over the current highly corruptible system. The real question is will it be ready for national prime time distribution if called upon? My Daddy taught me you learn by doing. And with Canada and Australia taking Bitcoin very seriously, swimming in national debts while looking for anything shaped like a life preserver, it might see Center Stage far sooner than we realize. Using a well thought-out economic standard for Bitcoin as a currency, like Switzerland has may be a great place to start (Switzerland seems to always be a great place to start, economically, doesn’t it?)
“Any (Federal Reserve) system which gives so much power and so much discretion to a few men, [so] that mistakes, excusable or not, can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic. This is a key argument against an independent central bank. Money is much too serious a matter to be left to the Central Bankers.” – Nobel Prize-winning economist Milton Friedman