Cryptocurrency is a “speculative asset” that should not be mistaken for money, leading economist David McWilliams has claimed.
On The Pat Kenny Show today, the author and journalist said people who believe cryptocurrency is money do not understand how money works.
The global market cap of all cryptocurrencies is currently over $2 trillion, with one single Bitcoin currently valued at $55k.
Mr McWilliams said private cryptocurrencies are not in the public’s best interest.
“Over thousands of years, one of the essential arguments has been between private money and public money and I make the point that money is always public,” he said.
“Real money is always public, issued by the State or an agent of the State.
“Private money, as in cryptocurrency, can only enrich those people who print the money.”
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'Speculative asset'
He described crypto as a “speculative asset”.
“Cryptocurrency is lots of things but it's not currency and it's not money,” he said.
“It is a speculative asset that goes up and goes down.
“I’m not giving people financial advice; if you want to buy crypto, away you go - but don't tell me it's money because if you tell me it's money, you don't understand money.”
Bitcoin accepted here is displayed in the window of a store in the East Village in New York, 15-05-2021. Image: Richard B. Levine/SIPA USA/PA ImagesMr McWilliams said money being public is vital to the monetary system.
“At the core of the monetary system is the idea that money is as much part of the State as the Gardaí are, as the Irish army is, as the tax system is,” he said.
“This is the State. You cannot divorce money from the State.”
Money
Mr McWilliams said there is a big difference in the way people and economists view money.
“When economists see a price going up, they see a number,” he said.
“When people see a price going up, we get a feeling, so money is psychological and it changes the way we think about the world.
“When house prices were going up in Ireland or are still going up in Ireland, people get a slightly euphoric feeling because money affects the way we think about the world.”
David McWilliams’ new book, ‘Money: The Story of Humanity’, is available to purchase in bookstores from this morning.
You can listen back here:
Main image: David McWilliams in studio. Image: Newstalk
