From day one or block one, if you will, Bitcoin has been touted as the future of currency. More specifically, some diehards have claimed that BTC, or a crypto asset of similar stature, will eventually become a pseudo-universal currency. Yet, a leading insider in the financial realm has claimed that a “single, global currency” isn’t feasible, nor logical.
Galit Isn’t Enamored With Bitcoin
On Friday, CNBC’s “Make It” column reported that Scott Galit, the chief executive at New York-headquartered Payoneer, is highly skeptical of a ubiquitous currency. Payoneer, for those who missed the memo, is a financial services startup (online money transfer, digital payments services) that has been backed by Susquehanna, Wellington Management, and a number of other prominent investment consortiums.
Speaking to CNBC journalists, Galit, formerly of Mastercard, noted that while many consumers have become acclimated to the idea of a universal medium of value, he just “doesn’t see it.” He added that frictionless commerce, which can be enabled by decentralized money and the avoidance of fiat currencies/systems (Bitcoin encapsulated), isn’t something that catches his attention.
Galit went on to subsequently explain why he’s skeptical of a global currency, whether it’s centralized or decentralized, based on database or blockchain, immutable or variable, etc. Specifically referencing the argument that Bitcoin can overtake all fiat in circulation, the Payoneer head honcho noted that regulatory incumbents, like the U.S. government, would be hesitant to accept BTC. More specifically, Galit noted that due to crypto’s day-to-day fluctuations, it would be non-sensical for entities to accept BTC for taxes.
Interestingly, however, as reported by Live Coin Watch previously, Ohio recently began to accept the flagship cryptocurrency for an array of business taxes. Yet, this example isn’t cut and dried, as Ohio’s system purportedly liquidates the BTC it receives instantly. Regardless, this caveat doesn’t mean that governments won’t ever hold and utilize cryptocurrencies for operational purposes.
Regardless, the seeming crypto cynic stated:
“Now you could have a debate whether taxes are fair or unfair or whatever but they are a reality. There are going to be taxes because governments need revenues. Countries actually need tax revenue in order to fund services for their residents.”
Then again, Galit seems to be missing the point of cryptocurrencies entirely. In the utopian world of decentralists, fiat would have been wiped off Earth’s face, with all transactions being facilitated by Bitcoin, and denoted by Satoshis or Bits.
The U.S. Fed Is In The Way Of A Global Currency
Even if bounding over crypto’s volatility qualms were achieved, Galit noted that the U.S. Federal Reserve (Fed) would evidently be hesitant to accept a global currency with open arms.
He explained that the Fed’s raison d’être, which is to “[promote] the stability of the financial system,” would become a thing of the past if a pervasive currency was implemented. More specifically, a non-sovereign currency would disallow the Fed from controlling interest rates, which has played a key role in macro markets for decades, if not centuries.
Considering that Fed supporters and former staffers at the entity have been skeptical of Bitcoin, it is likely that the body would put up a fight if cryptocurrencies were to overtake fiat. Yet, many anti-establishment proponents believe that the roadblocks the Fed will integrate will be surmountable… eventually, at least.