Could Bitcoin affect emerging market monetary policy?

by Justin Connell

“Federal Reserve Bank of St. Louis Vice President, Dr. David Andolfatto, is optimistic about Bitcoin, as an alternative currency could impose limitations on the ability of governments to raise revenue through money creation. … ‘What people do in high inflationary and hyperinflationary circumstances is seek alternative or competing currencies,’ Dr. Andolfatto tells ‘This could be the U.S. dollar, gold and things like that. Governments and central banks often then impose currency restrictions, maybe by implementing laws keeping people from opening USD denominated bank accounts.’ It’s not so easy, however, for a money printing central bank to stymie capital inflows into digital currency.” (02/13/17)