Bitcoin investors posed a collective bullish outlook on the digital asset following a Two $1 Trillion Coins proposal by a US Congressman. The bitcoin bulls were quite amused that politicians were seeking to print new money to inject in the economy as the Covid19-driven financial crisis deepens. A significant proportion of the crypto community were baffled by the incessant need to artificially create new money by the politicians and financial regulators.
The Two $1 Trillion Coins proposal
Michigan Congresswoman Rashida Tlaib seeking to create a temporary Universal Basic Income by the US government published the proposal named Automatic Boost to Communities Act. According to the proposal, the US Mint would issue ‘two $1 trillion platinum coins’ that would be distributed to American citizens to help them weather through the ongoing economic downturn.
The US central bank, the Federal reserve would purchase these coins and credit $2 trillion to the mint. Many political and mainstream economic analysts consider this as a wise move that would help stabilise the economy and prevent it from crumbling further.
Bitcoin bulls laugh off proposal
Bitcoin investors and the crypto community at large have laughed off the proposal pointing out the absurdity of fiat currency economics. According to key experts and notable crypto industry insiders the project would only serve to raise inflation and lacks any long-term sustainability.
Nakamoto Institute president Michael Goldstein joked in response to the news published by Bloomberg’s Joe Weisenthal that people would be able to buy a fraction of bitcoin with the newly minted $1 trillion coin. In this respect, Goldstein was referring to the rampant inflation that the implantation of such project would cause on the US economy.
Don't worry, you will be able to buy a fraction of a Bitcoin with a $1 trillion coin. https://t.co/OBD4RvkkST
— Bitstein (@bitstein) March 21, 2020
Goldstein’s sentiments were echoed by several people in the crypto twitter community evidenced by the replies to his tweet. Blockstream CSO and Pixelmatic CEO Samson Mow termed the idea foolish and questioned why the government was considering printing new money rather than cancelling income tax.
Mow observed that the US federal revenue was $3.46 trillion meaning that the government cancelling taxes would be a smarter move that would provide more relief.
Why do we see stupid ideas from gov officials like minting $1 trillion platinum coins, but nothing about canceling income tax?
In FY 2019, US federal gov revenue was $3.46 trillion. There’s your relief to the people and your economic stimulus.
— Samson Mow (@Excellion) March 22, 2020
Others proposed that the government could use the funds to buy bitcoin instead as that would make more sense than injecting more liquidity in the market which will definitely cause inflation.
The crypto community views notwithstanding, the US government continues to print more money in response to the ongoing economic crisis. The trend is expected to continue in the near future, as various sectors and small business remain overburdened by the implications of the Covid19 crisis.
Image Courtesy of nic_carter on Twitter