A digital currency beyond the reach of central banks is gaining acceptance. What does this mean for the dollar?
For those lacking a subscription, I have summarized the key messages:
- Bitcoin’s growing acceptance will not undermine the US dollar
- Bitcoin lacks attributes that are typical of a reserve currrency
- Key reserve currency attributes include:
- Controlled volatility
- Confidence, instilled by sound monetary policy and regulation
Bitcoin’s perceived value may diminish as more copycat virtual currencies emerge Recent surge in bitcoin is due to Chinese interest. Potential reasons include closed capital account, lack of sound alternatives and desired for diversification