Bullet points:
The paper assumes that under a Bitcoin Standard, fiduciary media, or state currencies will still exist. They will not be fully backed by Bitcoin, but they will be redeemable 1:1 at a fixed ratio for Bitcoin.
1. Due to near zero transactions costs for international (large) transactions, interest rate arbitrage would prevent countries from conducting localized, stimulative interest rate policies under the bitcoin standard, as it would quickly lead to capital flight of Bitcoin reserves, which would be deflationary and put banks at risk.
2. By issuing a national currency, central banks would still have LIMITED ability to act as lenders of last resort.
3. Based on comparable figures during the Classical Gold Standard period, Weber believes there would persistent be mild deflation (about 3%) , low nominal interest rates, fixed currency exchange rates, and good output growth under the bitcoin standard.
Programmabletx
npub13y…7epkg
2023-03-24 16:18:20
in reply to nevent1q…hgcl
Author Public Key
npub13yrcjh6v8efapytwfssvz5awxh23vry9uu2e3hu72xzm03e0fges47epkgPublished at
2023-03-24 16:18:20Event JSON
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"content": "Bullet points:\n\nThe paper assumes that under a Bitcoin Standard, fiduciary media, or state currencies will still exist. They will not be fully backed by Bitcoin, but they will be redeemable 1:1 at a fixed ratio for Bitcoin.\n\n1. Due to near zero transactions costs for international (large) transactions, interest rate arbitrage would prevent countries from conducting localized, stimulative interest rate policies under the bitcoin standard, as it would quickly lead to capital flight of Bitcoin reserves, which would be deflationary and put banks at risk. \n\n2. By issuing a national currency, central banks would still have LIMITED ability to act as lenders of last resort. \n\n3. Based on comparable figures during the Classical Gold Standard period, Weber believes there would persistent be mild deflation (about 3%) , low nominal interest rates, fixed currency exchange rates, and good output growth under the bitcoin standard.\n",
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