While El Salvador has adopted Bitcoin as legal tender, a Dutch official has exploded the cryptocurrency and called for an urgent curfew.
Peter Haskamp, Director of the Netherlands Agency for Economic Analysis of the Ministry of Economy and Climate Policy, published an article titled “Netherlands Should Ban Bitcoin.”
As the title of the article, Hasekamp lists an extensive list of reasons why the Dutch government should impose a complete ban on mining, trading and storing bitcoin (BTC). This could lead to a drop in price, the official said, because bitcoin “has no intrinsic value and is only valuable because others can accept it.”
The guide cited a common anti-cryptocurrency narrative, arguing that any cryptocurrency is unable to fulfill any of the three functions of money as a unit of account, a means of payment, and a store of value. He also cited other common arguments against bitcoin such as security concerns, the risk of fraud and scams, and argued that cryptocurrency is a useful tool for criminals.
Hasekamp said the Netherlands lags behind countries that have taken steps to “contain the crypto rush” in recent years. Dutch regulators have tried to tighten control over the markets, but without much success. The Central Planning Office noted the risks of cryptocurrency trading in 2018, but concluded that stricter regulation is not yet required,” the official wrote.
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In his article, Hasekamp focused on Gresham’s Law, the monetary principle, which states that overvalued currency or “bad money” tends to replace legally undervalued currency or “good money” from circulation. Hasekamp described Bitcoin as “bad money” and stated that Gresham’s Law can work with Bitcoin in exactly the opposite way:
Cryptocurrency demonstrates all the characteristics of “bad money”: unclear assets, uncertain valuations, and questionable trading practices. […] Has Gresham’s Law returned? No, on the contrary. Cryptocurrency is not used for regular payment transactions. […] bad money disappears from circulation because no one accepts it. “