Jim Chalmers, a key advisor during the global financial crisis, warns of potential risks to Australia's financial system as cryptocurrencies become more integrated with traditional finance. He cites Donald Trump's presidency as a catalyst for this integration, potentially leading to volatility and instability.
‘When Donald Trump assumes his role as the US president, it will bring an end to policies that have maintained a wall of separation between the traditional financial system and the crypto sector.’‘When Donald Trump assumes his role as the US president, it will bring an end to policies that have maintained a wall of separation between the traditional financial system and the crypto sector.
By contrast, other assets, including those used as currency, have value either because they are useful or desirable in themselves or because a government is willing to accept them as payment for tax obligations, like fiat currency. Stocks and corporate bonds represent a claim on the earnings and assets of the companies that issue them. And so on. Unless the Trump administration decides to treat bitcoin in the same way as US dollars , none of these applies to crypto.
At this point, it might reasonably be objected that critics have been calling crypto worthless ever since its introduction in 2009, and yet its price has soared spectacularly. It’s worth observing that the relatively simple Ponzi scheme operated by the late Bernie Madoff ran for at least 17 years, with the sum involved growing into tens of billions of dollars. He was only exposed by the GFC.
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